Timothy Damien Moran, a former Paradise Valley, Arizona-based broker employed by Atlanta, Georgia-based FSC Securities Corporation, has been barred by the Financial Industry Regulatory Authority (FINRA) based on findings that Mr. Moran engaged in private securities transactions without providing his firm with prior written notice. FINRA’s findings stated that Mr. Moran introduced firm customers to a Thomas Hampton to discuss possible investment in Mr. Hamptons’ hedge fund, Hampton Capital Management (HCM). Mr. Moran recommended that the customers invest, or consider investing, in HCM. Some of the customers who Mr. Moran introduced to the individual invested approximately $1.69 million. Mr. Moran also invested a total of $150,000 in HCM.
Mr. Moran received more than $200,000 as compensation for his assistance in obtaining investments in HCM. However, Mr. Moran failed to disclose his involvement or participation in selling interests in HCM to his firm or obtain the firm’s permission to participate in the private securities transactions. FINRA’s findings also stated that Mr. Moran failed to respond to FINRA requests for documents and information and provided false information to FINRA. On the contrary, Mr. Moran stated that he had not received any compensation for referring clients to HCM and stated that he had received more than $200,000 from HCM as payment for allowing Mr. Hampton to use his computers. The findings also included that Mr. Moran failed to timely amend his Form U4 to disclose a tax lien filed by the Internal Revenue Service (IRS) for $216,654. In addition to being permanently barred from association with any FINRA member in any capacity, Mr. Moran was ordered to disgorge $200,000 of ill-gotten gains.
“Selling away” is the inappropriate practice of an investment professional who sells or solicits securities or investments not held, approved, or authorized by the brokerage firm with which the professional is associated. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior which violate industry rules and procedures. In order to protect investors from such misconduct, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors do not establish and implement these protective measures, they may be a liable to account holders for losses flowing from the misconduct. As a result, account holders who have suffered losses stemming from unapproved investments, i.e. investments “sold away,” can bring forth claims to recover damages against broker-dealers like FSC Securities Corporation, which have a duty to supervise its employees in order to prevent the above-described misconduct.
Have you suffered losses in your FSC Securities Corporation account due to broker 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 fraudulent and illegal 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 , 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.