David K. Stone, of Action, Massachusetts, a stockbroker formerly registered with Liberty Tree Advisors, LLC, has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity based upon consenting to findings that he failed to supervise a firm representative’s private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2016049134901 (Apr. 13, 2017).
According to the AWC, in May of 2015, a fund was established by two of the firm’s partners as well as a registered representative, KG, whom Stone was responsible for supervising. The fund was reportedly meant to finance industrial and residential property pertaining to the cannabis industry located in Colorado. Stone apparently discussed the fund with KG, and was cognizant that KG sought to accumulate limited partnership interests in the fund to raise capital. The AWC stated that Stone did not accurately determine the nature of KG’s activities, and incorrectly concluded that KG’s facilitation of limited partnership interests did not somehow constitute private securities transaction but instead consisted of outside business activities. As a result, Stone had not supervised KG’s activities in this regard.
The AWC revealed that in May of 2015, KG took part in seven investors’ total contribution of nearly $1,400,000.00 in the fund. The firm’s records and books had not referenced KG’s transactions because they were not recorded. Stone’s conduct was found by FINRA to be violative of FINRA Rules 2010, 3110, 3280, as well as NASD Rule 3040. His registration with Liberty Tree Advisors was terminated on January 6, 2017.
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