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Malcolm Jamal Babin, a Stockbrokerwith PFS Investments, Inc., was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member after consenting to findings that he had failed to cooperate with a FINRA investigation into allegations that Babin had converted customer funds. Letter of Acceptance, Waiver, and Consent No. 20150454876-01 (July 30, 2015). Babin is barred from acting as a broker or otherwise associating with firms that sell securities to the public, according to FINRA.
According to the AWC, on July 7, 2015, FINRA had requested that Babin provide information and documents to them, pursuant to Rule 8210, concerning allegations that Babin had converted non-firm customer funds and also engaged in outside business activities.
The AWC noted that Babin reached out to FINRA on July 13, 2013, indicating that he had received FINRA’s request for information and documentation, but that he would be cooperating with FINRA at any point. As a consequence of refusing FINRA’s requests, Babin was found by FINRA to have violated Rule 8210 and 2010, and barred as a result.
Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.
FINRA registered representatives like Babin who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and equitable principles of trade.
Additionally, FINRA Rule 3270 has stated that no registered person like Babin may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his/her member firm, unless he/she is provided prior written notice to the member. 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.
Public disclosure records via FINRA’s BrokerCheck reveal that Malcolm J. Babin has been subject to three disclosure incidents. On May 8, 2015, PFS Investments Inc. permitted Babin to resign after allegations surfaced that the firm obtained information indicating that Babin was involved in misappropriation, unlicensed security solicitation, and undisclosed outside business activity and/or private securities transaction(s). On June 18, 2015, Babin became subject to a customer dispute (pending), where a customer is asking for $52,500.00 in damages per allegations that Babin misappropriated funds in connection with a solicitation to purchase a variable annuity contract.
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.