William Blake McGowan of Little Rock Arkansas submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for engaging in private securities transactions, a type of broker misconduct known as selling away.
In July 2017, while employed by MML Investors Services, LLC, William McGowan purchased $55,000 of securities in a pooled real estate investment. More specifically, Mr. McGowan purchased shares in an Arkansas LLC formed to purchase and manage vacation property rentals in Florida. FINRA found that Mr. McGowan failed to provide the required prior written notice to his member firm of the transaction. Further, he falsely stated on a compliance attestation that he had not made any personal investments.
FINRA Rule 3280 requires that prior to participating in a private securities transaction, a person associated with a member firm shall provide written notice to his or her firm “describing in detail the proposed transaction and the person’s proposed role therein[.]” FINRA Rule 3280 defines a private securities transaction as “any securities transaction outside the regular course or scope of an associated person’s employment with a member[.]” FINRA Rule 2010 requires FINRA members and associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” A violation of FINRA Rule 3280 is a violation of FINRA Rule 2010. Without admitting or denying FINRA’s findings, William McGowan was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for thirty business days. The suspension is in effect from March 16, 2020 through April 27, 2020.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from private securities transactions (selling away), and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like MML Investors Services, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your MML Investors Services account due to private securities transactions by your broker? Was William McGowan your stockbroker? 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 MML Investors Services stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
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 40 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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.