Rani Soto of Newark New Jersey a stockbroker formerly registered with Prudential Investment Management Services has been charged by Financial industry Regulatory Authority Department of Enforcement with engaging in outside business activities that were not disclosed to the securities broker dealer and for failing to timely cooperate with FINRA during the course of its investigation into Soto’s outside activities. Department of Enforcement v. Rani Soto Disciplinary Action No. 2018059766702 (Aug. 28, 2020).
According to the Complaint, between January of 2017 and September of 2018, Soto took part in five outside business activities including LeafLaunch LLC, National Cannabis Commission, CannaGather Inc. and High New York LLC.
The Complaint alleges that LeafLaunch was formed by Soto and others to provide cannabis education and consultation services including helping customers produce revenue. The Certificate of Formation filed with New Jersey Department of the Treasury showed Soto as LeafLaunch’s member. The stockbroker allegedly established accounts to transact on LeafLaunch’s behalf. FINRA alleges that Soto was also one of four individuals who created National Cannabis Commission which was a New Jersey non-profit corporation that advocated for social justice in reference to the cannabis industry. Soto was listed as a member of the corporation on the Certificate of Incorporation filed with New Jersey Department of the Treasury.
The Complaint alleges that CannaGather was created by Soto as a cannabis networking business that included teaching politicians and business professionals about cannabis. On June 30, 2018, the stockbroker allegedly struck up a Market Lender Agreement with the company for the creation of a New Jersey franchise in which he would receive a 30 percent financial stake. The regulator also alleges that between January of 2017 and April of 2017, Soto involved himself with High New York where he engaged in outreach.
FINRA Department of Enforcement alleges that Soto was required under Prudential’s policy to complete annual questionnaires and disclose any outside business activities. The stockbroker was also required to make outside business activity disclosures on his Form U4. Soto allegedly failed to disclose those activities. Between May of 2017 and July of 2018, at least four false statements were allegedly made to Prudential by the stockbroker so that he could hide his outside business activities. Soto purportedly falsified his response to annual compliance questionnaires and falsely reported that his Form U4 was current. The stockbroker allegedly falsely told Prudential that he did not engage in any activities without notifying the securities broker dealer and obtaining its approval. FINRA Department of Enforcement alleges that the stockbroker violated FINRA Rules 2010 and 3270.
The Complaint also alleges that Soto failed to timely respond to three requests made by FINRA between September of 2018 and February 2019. Soto was suspended for his failure to respond but this suspension was lifted in April of 2019. Soto allegedly neglected to provide complete or timely responses to the fourth and fifth requests made by the regulator regarding his outside business activities. Those requests called for Soto’s cooperation by July of 2019. FINRA Department of Enforcement contends that Soto’s incomplete and untimely responses hampered its investigation into his activities. The Complaint alleges that the stockbroker violated FINRA Rules 2010 and 8210.
On August 10, 2018, Soto was discharged by Prudential based upon accusations of his undisclosed outside business activities while employed by the securities broker dealer.
