Patrick M. Hudson, of Baltimore, Maryland, a stockbroker formerly registered with RBC Capital Markets, LLC, has been fined $10,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Hudson, inter alia, engaged in outside business activities and private securities transactions without authorization from his firm. Letter of Acceptance, Waiver and Consent, No. 2015046351701 (Aug. 10, 2017).
According to the AWC, RBC’s policies restricted Hudson from engaging in securities transactions away from his firm prior to obtaining the firm’s authorization. Notwithstanding, Hudson reportedly made real estate investments to generate income and capital gains. Hudson evidently facilitated transactions with investors that subsequently opened accounts with the firm.
The AWC stated that between July of 2011 and October of 2014, Hudson effected a $490,000.00 promissory note transaction away from his firm, where RBC customers were lenders of the funds that went to companies Hudson solely controlled or owned. Apparently, these notes transactions were designed to fund real estate investments that Hudson personally had a stake in. Hudson’s failure to retrieve consent from RBC was conduct FINRA found to be violative of FINRA Rules 2010 and NASD Rule 3040.
Further, Hudson established companies in the State of Maryland, where he pursued the business development of real estate entities managed away from RBC. The AWC revealed that RBC never consented to Hudson’s outside business activities. Since Hudson failed to report these outside business activities as required, FINRA found his conduct to be violative of FINRA Rules 2010 and 3270, as well as NASD Rules 2110 and 3030.
FINRA Public Disclosure reveals that RBC Capital Markets fired Hudson on June 29, 2015, based upon allegations that he effected unauthorized transactions involving customer funds, engaged in outside business activities without the firm’s consent, and failed to verify deposits of funds in accordance with company policy.
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