Alexander Jon James of Royal Palm Beach, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly participating in outside business activities and unauthorized transactions in violation of NASD Rule 3040 and FINRA Rules 3270 and 2010.
In January of 2012, Alexander Jon James joined Voya as an investment company products/variable contracts representative. According to FINRA, in April of 2020 it found that Alexander Jon James and two accomplices established a company in which they charged members monthly subscription fees for access to a website. Mr. James took part in business development and marketing, as well as running day to day operations for the company. The FINRA findings also stated that Mr. James participated in private security transactions with two firm customers who invested a total of $667,000 in the company’s shares and profited $16,000 for his contributed work. In addition to the FINRA findings, he allegedly made false statements regarding his participation in outside business activities and private security transactions on three of his members firms annual compliance questionnaires.
NASD Rule 3040, states that “[n]o person associated with a member shall participate in any manner in a private securities transaction except in accordance with the requirements of this Rule.” The Rule further requires that an associated person “shall provide written notice to the member with which he is associated describing in detail the proposed transaction and the person’s proposed role therein” FINRA Rule 3270 provides, in relevant part, 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.” A violation of Rule 3270 is also a violation of FINRA Rule 2010. FINRA Rule 2010 requires associated persons, in the conduct of their business, to observe high standards of commercial honor and just and equitable principles of trade.
Without admitting or denying FINRA’s findings, Alexander Jon James consented to the sanctions and to entry of findings that he took part in outside business activity without an initial written notice to his member firm. Alexander Jon James was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for one year. The suspension is in effect from April 6, 2020, through April 5, 2021.
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 unauthorized trading and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Voya, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Voya account due to unauthorized trading and/or other misconduct by your broker? Was Alexander Jon James 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 Voya 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