The Financial Industry Regulatory Authority suspended an ex-LPL Financial broker from association with any FINRA member in any capacity for six months for participating in private securities transactions and engaging in two outside business activities between 2013 and 2018 without providing prior written notice to the firm, according to FINRA.
Without admitting or denying the findings, Michael B. Mountjoy signed a letter of acceptance, waiver and consent April 29 in which he agreed to the suspension and pay a $10,000 fine. FINRA accepted the letter Monday.
Starting in April 2014 and continuing until November 2017, Mountjoy solicited investors, consisting of friends and business associates, to buy interests in a limited liability company formed to invest in a minor league professional soccer team based in Louisville, Kentucky, according to FINRA. He failed to provide LPL with prior notice or obtain the firm’s advance approval, FINRA said, noting Mountjoy solicited a total of $378,000 in investments in the LLC from four individuals.
Mountjoy also failed to provide written notice to LPL before engaging in two outside business activities. Starting in 2013 and continuing until his termination from LPL in 2018, Mountjoy was a member and treasurer of an LLC that owned and leased real estate, and also a co-owner and board member of another LLC that owned a fund created to promote foreign investments in Indiana and Kentucky, according to FINRA.
LPL did not immediately respond to a request for comment Tuesday. Aegis J. Frumento, a partner at Stern Tannenbaum & Bell, the New York law firm that represented Mountjoy in the FINRA dispute, said only that he and his client were “pleased that the matter has been satisfactorily resolved, and glad to have it behind us.”
Mountjoy first became registered with a FINRA member firm in July 2010 as a general securities representative with LPL and remained associated with the firm until it terminated his registration via Form U5, filed Dec. 11, 2018, according to FINRA. The Form U5 stated that Mountjoy was terminated for “[f]ailure to timely disclose private securities transaction and solicitation of clients and non-clients for investments inside and outside of the Firm,” the FINRA AWC letter said, quoting LPL.
Mountjoy violated LPL’s outside business activity and private securities transaction policy, according to the only disclosure on his profile at FINRA’s BrokerCheck website. He is not currently registered as a broker or RIA, according to BrokerCheck.
Based on his actions, FINRA claimed Mountjoy violated FINRA Rule 3270 (governing outside business activities of registered persons), NASD Rule 3040 (governing private securities transactions of an associated person, for conduct prior to Sept. 21, 2015), FINRA Rule 3280 (governing private securities transactions of an associated person, for conduct on or after Sept. 21, 2015) and FINRA Rule 2010 (governing standards of commercial honor and principles of trade).