Joseph Daniel Krueger, II, of Westlake, Ohio, a stockbroker registered with Stifel, Nicolaus & Company, has been fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in unapproved private securities transactions. Letter of Acceptance, Waiver and Consent, No. 4229727 (Dec. 4, 2017).
According to the AWC, in June of 2014, Krueger’s outside business activity had been made known by him to Stifel Nicolaus, where Krueger informed the firm that he established a startup business in order to create a social media monitoring application. The AWC stated that between February of 2015 to July of 2015, Krueger then made arrangements with four of the firm’s customers and one non-firm customer to make a $200,000.00 investment in the business that Krueger created.
The AWC revealed that the investors in Krueger’s company received convertible promissory notes which paid the customers six percent in interest. Evidently, customers were provided the opportunity to convert the unpaid interest and any principal that was outstanding into equity, where each $50,000.00 investment equated to a one percent ownership interest.
Throughout this period; however, Krueger never informed Stifel Nicolaus about his involvement in the securities transactions. FINRA found that Krueger’s unauthorized private securities transactions constituted violations of FINRA Rule 2010 and NASD Rule 3040.
FINRA Public Disclosure confirms that Krueger was fired on September 30, 2015, based upon allegations that he sold away from his firm.
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