The Financial Industry Regulatory Authority (FINRA) recently sanctioned former Ameriprise Financial Services, Inc. (Ameriprise) broker Radcliffe Daly (Daly) concerning allegations that between May 2013 and November 2013, while Daly was registered with Ameriprise, Daly mismarked more than 250 order tickets for solicited transactions as unsolicited. In addition, FINRA alleged that during the same period Daly engaged in private securities transactions (also known as “selling away”) without providing written notice to Ameriprise. FINRA also alleged that Daly exercised unauthorized discretion in customer accounts.
Daly entered the securities industry in 2003 and left the industry in June 2014. During the majority of this time Daly was associated with Ameriprise until January 2014.
FINRA alleged that Daly recommended a penny stock, Sloud, Inc. (SLOU), to numerous customers during 2013. According to FINRA Daly placed 292 buy transactions for 43 different customers in the Sloud stock between May 3 and November 7, 2013. However, instead of properly marking the transactions as solicited, Daly allegedly falsely marked 253 of these purchases as unsolicited. FINRA also found that Daly continued to solicit purchases of Sloud and to inappropriately mark the trades as unsolicited even after being told by his firm in June 2013 that he could not solicit purchases of the stock because it was a penny stock and not supported by firm research. From the allegations made by FINRA it appears that Daly attempted to circumvent Ameriprise’s instructions by mismarking the tickets as unsolicited.
FINRA found that by mismarking these order tickets, Daly created false books and records. In addition, FINRA also found that three of Daly’s customers invested in a private placement of Sloud stock during 2013 after Daly’s had recommended the stock to these customers. FINRA found that Daly failed to execute or report these private placement transactions to Ameriprise. FINRA also found that Daly helped effectuate one of the private transaction through a transfer of funds from the customer’s brokerage account to the Sloud issuer.
FINRA concluded that through his actions, Daly violated NASD Rule 3040 by participating in private securities transactions and NASD Rule 2510(b) by exercising discretion in the accounts of five customers during 2013 without obtaining written authorization to do so.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of penny stocks, selling away, and unsuitable investments in high risk securities. Our consultations are free of charge and the firm is only compensated if you recover.