Richard Craig Berg of Town and Country, Missouri submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in private transactions in violation of FINRA Rules 3270, 2010 and NASD Rules 3040 and 2110.
From 1990 to 2018, Richard Berg was registered as a General Securities Representative with Prudential Securities and Wells Fargo. According to FINRA, Mr. Berg failed to timely notify his firms in which he engaged in two outside business activities and received compensation. The findings stated between 2008 and 2018, Mr. Berg and a firm customer owned and operated a company engaged in the acquisition and management of residential rental properties. Richard Berg also owned a residential rental property and rented the property out. The findings also stated that Mr. Berg failed to notify his firms of at least twelve purchases of securities issued by eleven privately held companies totaling $1,251,000. In addition, he completed at least four compliance questionnaires during this period incorrectly attesting that he had disclosed all private securities transactions to the firm.
FINRA Rule 3270 provides that “[n]o registered person may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member, in such form as specified by the member.” Before December 15, 2010, NASD Rule 3030 imposed a similar prohibition. A violation of these rules is also a violation of FINRA Rule 2010 (for conduct on and after December 15, 2008) or NASD Rule 2110 (for conduct before December 15, 2008).
Without admitting or denying FINRA’s findings, Richard Craig Berg was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months. The suspension is in effect from October 21, 2019, through February 20, 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 transactions, and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Prudential Securities and Wells Fargo, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Prudential Securities or Wells Fargo account due to private transactions by your broker? Was Richard Craig Berg 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 Prudential Securities and Wells Fargo 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 firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.