FINRA Bars Lizabeth Yy Over Investigation Into Promissory Note Sales to Customers

shutterstock_133831631The investment fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Lizabeth Ty (Ty). According to BrokerCheck records Ty is subject to three pending customer complaints, while registered with Park Avenue Securities LLC (Park Avenue) in Houston, Texas.  The regulatory also filed a complaint against Ty attempting to investigate the circumstances of the sale of claimed unregistered securities. (FINRA No. 20160493150-01).  When Ty refused to cooperate with the investigation, FINRA automatically barred Ty from the industry.

According to BrokerCheck records Ty has three customer complaints pending concerning the sales of promissory notes.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  At this time it unclear the nature and scope of Ty’s outside business activities and private securities transactions.  However, according to Ty’s public records her outside business activities include a real estate license in Texas.  Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

Ty was associated with brokerage firm Park Avenue from January 2006 until July 2015.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm.  However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

In cases of selling away the investor is unaware that the advisor’s investments are improper.  In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.

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 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.