The Financial Industry Regulatory Authority suspended an ex-Cetera broker from association with any FINRA member in any capacity for three months after he allegedly made a $30,000 private securities investment in a trucking firm without notifying Cetera and then tried to conceal it from the firm, according to FINRA.
Without admitting or denying the findings, Henry A. Taylor III signed a letter of acceptance, waiver and consent June 19 in which he agreed to FINRA’s suspension as well as its request that he pay a $7,500 fine. FINRA accepted the letter Monday.
From September 2013 through March 2017, Taylor was registered with FINRA as a general securities representative and as an investment company/variable contracts principal through Cetera Advisor Networks, according to FINRA. The reason for his departure from Cetera was not disclosed in the AWC letter or on FINRA’s BrokerCheck website.
Cetera and Christopher Parrington, an attorney at the law firm Kutak Rock, who represented Taylor in the dispute, did not immediately respond to requests for comment Wednesday.
In early 2017, Taylor and a “long-time friend and customer,” identified in the AWC letter only as “RB,” attended a presentation about an opportunity to invest in a trucking company, according to FINRA. After the presentation, Taylor and RB decided to invest $15,000 each to reach the $30,000 minimum investment in the firm, FINRA said.
On Feb. 15, 2017, RB gave Taylor a $15,000 check for his portion of their joint investment and Taylor deposited that check into his own personal account, presented the investment promoter with a $10,000 check, and, “days later, made a further payment of $20,000 for their joint investment,” according to FINRA.
The trucking company investment represented a securities transaction “outside the course or scope of Taylor’s employment with Cetera” and he “did not notify Cetera about the transaction, his role in it, and whether he had received or expected to receive selling compensation in connection with the transaction,” according to FINRA.
His “failure to provide the required notice to Cetera is aggravated by the fact that he concealed the investment from the firm,” FINRA alleged.
However, in mid-February 2017, “Cetera learned that Taylor was either participating or contemplating participating in the trucking company investment, [and] warned Taylor that any such investment would constitute a prohibited private securities transaction that could result in his termination,” according to FINRA.
Taylor “falsely denied making any investment and falsely disavowed any intent to pursue any investment,” FINRA alleged.
— Check out FINRA: Broker Broke Into Former Firm’s Office for Files on ThinkAdvisor.