Securities Lawyers Blog
The Financial Industry Regulatory Authority (FINRA) sanctioned broker Robert Livingstone (Livingstone) concerning allegations that Livingstone failed to respond FINRA’s request for documents concerning claims that Livingstone deposited a customer’s money into a private company called Newland Strategies.
Livingstone first became registered with FINRA in 1992 as a General Securities Representative with Morgan Stanley DW, Inc. Thereafter, in 2001, Livingstone registered with BB&T Investment Services, Inc. (BB&T). Livingstone remained registered with BB&T until the firm filed a Form U5 that terminated his registration with on October 3, 2013. BB&T stated on Livingstone’s BrokerCheck that a “client alleged she thought she invested 200,000 with BBTIS through her BBTIS rep in February 2013. However, it was deposited into a private company called Newland Strategies by her rep and was told she lost $68,000.”
FINRA alleged that in October 2013, BB&T terminated Livingstone’s registration after the firm investigated a customer complaint against Livingstone alleging participation in a private securities transaction. On March 21, 2014, FINRA investigated the customer complaint against Livingstone and requested documents and information from Livingstone. FINRA stated that Livingstone did not produce the requested documents and information after several requests. It was alleged that on April 24, 2014, Livingstone informed FINRA that he would not comply with requests. As a result of Livingstone’s failure to provide documents and information as required by FINRA Rule 8210, FINRA found that Livingstone violated FINRA Rules 8210 and 2010 and imposed a bar from the financial industry.
The allegations against Livingstone are consistent with a widespread supervisory issue in the financial industry commonly referred to as a “selling away” violation. By selling away securities, a broker solicits investments that were not first approved by the broker’s firm. However, brokerage firms owe a duty to investors and the public to properly supervise its employees in order to ensure that their activities do not take advantage of the public trust placed in them by their position. Selling away often occurs when brokerage firms either fail to put in place a reasonable supervisory system or fail to implement their supervisory requirements. Victims of selling away are unaware that the advisor’s activity is not authorized and potentially illegal. In addition, the selling away activities can go on for years and the investor does not learn that the broker’s activities are improper until the investment scheme is publicized, the investment losses mount, or the broker simply stops returning client calls.
The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms’ failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.