Patrick Emanuel Sutherland of Charlotte North Carolina a stockbroker formerly employed by Innovation Partners LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a FINRA Order Accepting Offer of Settlement containing findings that Sutherland controlled or managed Innovation Partners LP when he was disqualified from doing so. Department of Enforcement v. Patrick Emanuel Sutherland et al. Disciplinary Proceeding No. 2016050957901 (Aug. 26, 2019).
According to the Order, in 2007, Innovation Partners LLC was founded by Sutherland and another stockbroker Yanique Lawrence. The Order indicated that since then, real estate investment trusts, direct participation programs, mutual funds, annuities and life insurance, and other investments have been sold by the firm throughout twenty locations in the United States.
In September of 2015, Sutherland was issued a bill of indictment by a grand jury for the United States District Court for the Western District of North Carolina which contained felony charges against Sutherland of filing a false tax return and committing obstruction as it related to a grand jury subpoena. Allegedly, Sutherland failed to report income generated through a company that he owned offshore. Sutherland was found guilty on those charges in October of 2016 and disqualified by FINRA from associating with any member in any capacity for at least ten years.
Even though Sutherland was disqualified, he continued to associate with the firm. In particular, stockbrokers of the firm had been contacted by Sutherland as it concerned securities business. FINRA found that the stockbrokers were provided direction from Sutherland concerning the timing and amount of commissions that would be paid to them from the transactions they executed through the firm. Also, Sutherland reportedly reviewed and authorized requests concerning the stockbrokers’ outside business activities. This included an outside business activity in which a stockbroker facilitated customer loans secured through real estate. FINRA indicated that Sutherland even helped approve another stockbroker’s use of a seminar invitation when this request was previously rejected by the firm’s compliance personnel.
The Order stated that Innovation Partners’ financial documents, among other reports, had been monitored in part by Sutherland, and at least one of the firm’s principals who handled accounting issues of the firm was directed by him. FINRA indicated that Sutherland responded to inquiries which had been made by internal auditors. The Order also stated that Sutherland actively enlisted stockbrokers to become employed with Innovation Partners, and he negotiated terms of employment for the chief compliance officer of the firm.
FINRA concluded that Sutherland’s ongoing involvement with Innovation Partners despite being disqualified was violative of FINRA Rule 2010, National Association of Securities Dealers (NASD) Rule 1021, and FINRA By-Laws Article III, Section 3(b).
Sutherland’s employment with Innovation Partners LLC has been terminated as of October 28, 2016.
