Dennis Mark Adam Merritt, of Clearwater, Florida, a stockbroker with Wells Fargo, was suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity pursuant to an Order Accepting Offer of Settlement containing findings that Merritt engaged in private securities transactions, made unsuitable recommendations to investors, and falsified information to Wells Fargo in connection with such. Department of Enforcement v. Merritt, No. 2013036962201 (June 14, 2016).
According to the Order, in August and September 2011, Merritt had engaged in the participation of three private securities transactions concerning SavvyPhone Class A Units. Apparently, investors JA and MA, DD, and LR had purchased a $115,000.00 of SavvyPhone securities in the aggregate.
FINRA found that Merritt had effected the transactions through positioning the SavvyPhone investment opportunity to JA and MA, DD, and LR; making recommendations to purchase such securities; aiding in the sale of DD’s mutual funds to purchase the SavvyPhone securities; aiding JA and MA and DD in the completion of subscription documents; facilitating meetings with LR and DE concerning the investments in SavvyPhone; and obtaining funds from LR to purchase the investments.
Apparently, Merritt never informed Wells Fargo via written notice about the aforementioned SavvyPhone private securities transactions. As such, FINRA found that Merritt violated FINRA Rule 2010 and NASD Rule 3040.
The AWC also stated that Merritt engaged JA and MA, DD, EB, and LR in unsuitable recommendations concerning the SavvyPhone Class A Unit investment. Merritt reportedly failed to conduct a legitimate investigation into SavvyPhone for purposes of ensuring that the investments were actually suitable for them. FINRA found that Merritt failed to have a legitimate basis to make such recommendations, and found him to be in violation of FINRA Rule 2010 and NASD Rule 2310 as a result.
Furthermore, FINRA found that Merritt lied to Wells Fargo concerning his aforementioned involvement in the SavvyPhone transactions. Particularly, Merritt attested to his firm in 2012, via an Associate Annual Attestation, that he was in compliance with his firm’s policies concerning private securities transactions. Wells Fargo apparently did not allow for representatives such as Merritt to engage in private securities transactions. The representations that Merritt made concerning his compliance with his firm’s policies was apparently false. Wells Fargo terminated Merritt as a result. Merritt was found by FINRA to have violated FINRA Rule 2010 as a result of his false attestations in this regard.
Public disclosure records reveal that Merritt was also subject to another regulatory action in August 31, 1998, where the South Carolina Securities Division issued a Stipulation and Consent Order Agreement requiring that Merritt withdraw his securities registration application and not reapply for a three-year period.
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