The Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) received an Offer of Settlement to a complaint that alleged James Scott of Fort Worth, Texas knowingly and substantially aided and abetted another individual engaged in the offer and sale of securities transactions in Texas when the individual was not registered as a stockbroker with the State of Texas or FINRA.
Scott became a FINRA member in 1997 and was associated with eleven different FINRA and NASD members throughout his career. Between March 28, 2012 and December 18, 2012, Scott was registered with FINRA through FSC Securities Corporation (FSC) as a General Securities Representative (GSR) and between August and December 2012, acted as a General Securities Principal (GSP).
Under the terms of the Offer of Settlement, Scott consented to FINRA’s findings without admitting to or denying them. FINRA alleged that between April and December 2012, Scott knowingly aided an individual in the offer and sale of securities while the individual was not registered as an associate FINRA member. Scott was RO’s long-time sales assistant and engaged in these activities while RO’s association with FSC was still pending.
Scott allegedly facilitated RO’s efforts to act as a securities broker despite not being registered. FINRA found that Scott allegedly facilitated investment seminars for RO to solicit investment business from current and potential clients, made arrangements for RO to meet potential clients and executed trades brokered by RO for clients. FINRA further alleged that Scott shared at least $45,700 of his transaction-based commission income with RO while RO was still unregistered with the State of Texas. This conduct would be in violation of the Securities Exchange Act of 1934, NASD Conduct Rule 2420 and FINRA Rule 2010.
In addition, during his on-the-record (OTR) testimony, FINRA alleged that Scott knowingly provided false information to FINRA staff regarding the nature of his relationship with RO and the conduct of Scott while he was with FSC. Scott provided false testimony on his OTR about RO’s extensive involvement in providing securities advice and making investment recommendations to various customers. Scott’s false answers slowed the investigation and were a violation of FINRA Rules 2010 and 8210.
For all the above alleged actions, Scott was barred from association with any FINRA member in any and all capacities.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers like FSC Securities Corporation to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm, such as FSC Securities Corporation own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like FSC Securities Corporation, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your FSC Securities Corporation investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.