Chandler D. Le of Bala Cynwyd, Pennsylvania, a registered representative with NYL Securities, was fined $7,500 and suspended for two months from associating with any Financial industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he engaged in an outside business activity and commingled customer funds in a business account under his personal control. Letter of Acceptance, Waiver and Consent, No. 2014041392601 (Sept. 23, 2015).
According to the AWC, NYL Securities permitted representatives to engage in certain outside business activities provided that the representatives complied with the necessary disclosure process. However, the firm prohibited its representatives from engaging in certain outside business activities which included providing tax preparation services.
The AWC stated that from 2012 – 2014, Le had performed work for and received compensation from a tax preparation firm outside the scope of Le’s relationship with NYL Securities. Le reportedly failed to provide the necessary notice to NYL Securities. FINRA found that Le violated FINRA Rules 3270 and 2010 as a result.
Further, in February 2014, Le had received approximately $6,395 in cash from one of his insurance company customers that he used to pay initial premiums on an insurance policy for the customer’s son. The AWC stated that Le deposited the funds in his business bank account and wrote a check in the same amount to the insurance company for the premium. FINRA found that by depositing the customer’s cash into his business account, he commingled the customer’s funds with his own in violation of Rule 2010.
Selling away, also known as private securities transactions or undisclosed outside business activities, occurs when a stockbroker engages or participates in the sale of securities to investors outside of the formal approval of the securities firm with whom they are associated.
As a general matter, stockbrokers are only permitted to engage in the solicitation or sale of investments and investment related products approved by their firm. However, quite frequently, stockbrokers solicit, participate, or directly engage in the sale of typically unregistered securities or investments without the approval and outside of the auspices of their firm. These investments may take on many forms, and may include the recommendation of an outside money manager, or a hedge fund, which may sometimes turn out to be a Ponzi scheme. Sometimes these outside investments may include off-shore securities, insurance trusts, stocks or ownership interests in small businesses, startup ventures, corporate debentures, mortgage notes, private placements, promissory notes, oil & gas interests, real estate partnerships, pre-IPO shares, and a variety of other investments.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.