James Michael O'Brien aka Jay O'Brien, a broker formerly with Boston, Massachusetts based LPL Financial LLC, submitted a letter of acceptance, waiver, and consent after the Financial Industry Regulatory Authority (FINRA) entered findings that Mr. O'Brien participated in private securities transactions outside the regular course and scope of his employment with his member firm. Mr. O'Brien neither provided notice of these transactions to the firm nor did he receive approval. Mr. O'Brien, of Encinitas, California, was suspended from association with any FINRA member in any capacity for 18 months. FINRA's findings stated that Mr. O'Brien referred investors to an entity that sold them securities in the form of promissory notes. The total dollar amount of the investments was $2,654,596. For these referrals, Mr. O'Brien was compensated a total of $125,416. The suspension is in effect from January 7, 2013 through July 6, 2014.
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.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to Mr. O'Brien's fraudulent activity can bring forth claims to recover losses against LPL Financial, which should have prevented Mr. O'Brien from committing the described illegal activity.
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. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.