David Albert Ross, of Murfreesboro, Tennessee, a stockbroker formerly registered with Woodbury Financial Services, Inc., has been suspended for ten months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity by consenting to findings that he entered into unauthorized loan arrangements with customers of the firm, and engaged in outside business activities that were not disclosed to his firm for approval. Letter of Acceptance, Waiver and Consent, No. 20160496384-01 (Oct. 25, 2017).
According to the AWC, Ross’ former employer, Signator Investors Inc., disallowed all circumstances involving a loan transaction between a customer and firm employee. The firm’s policy was reportedly disregarded by Ross, where he borrowed $20,000.00 from one customer in 2008 and $27,000.00 from another customer in 2009. Ross apparently lied about the loans when submitting his firm’s annual compliance certification. His registration with Signator Investors, Inc. was terminated on May 7, 2010.
During the time he was employed with Woodbury Financial Services, Ross was required to abide by restrictions on employees borrowing from customers. Notwithstanding, he accepted another $31,000.00 loan from a customer in 2011, and $11,000.00 from another customer in 2015. Apparently, Ross made false representations in regard to his borrowing arrangements within six compliance questionnaires administered to him by Woodbury, representing that he acknowledged that the firm disallowed funds to be borrowed from customers and had complied with the firm’s restrictions in that regard. FINRA found that Ross’ conduct was violative of FINRA Rules 2010 and 3240, and NASD Rules 2110 and 2370.
The AWC further stated that consulting services had been provided by Ross to customers without informing the firms about Ross’ activities. Apparently, from 2011 to 2016, he was compensated $50,000.00 by customer GA – a corporation in which Ross served as a director. No disclosure or approval had been sought by Ross from Woodbury even though Ross represented on six occasions to his firm that he complied with their policies necessitating disclosure of outside business activities. FINRA found that each false certification that Ross made was a violation of FINRA Rule 2010 and NASD Rule 2110, and found that his undisclosed outside business activities were violative of FINRA Rules 2010 and 2370, as well as NASD Rules 2110 and 3030.
Ross was fired by Woodbury Financial Services, Inc. on April 15, 2016, based upon allegations of Ross’ violations of the firm’s policies by way of his failure to report outside business activities and for entering into improper loan arrangements with customers of the firm.
FINRA Public Disclosure reveals that a customer initiated investment related arbitration claim involving Ross’ misconduct was settled for $32,849.00, in which the customer’s claim rested on allegations that Ross, while associated with Signator, effected unauthorized BP stock transactions in the customer’s account. NASD Arbitration No. 06-01934 (Sept. 28, 2007).
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