Our firm is investigating claims made by VisionPoint Advisory Group, LLC and LPL Financial LLC (LPL) against broker Vincent Sturm (Sturm). According to the two firms Sturm was discharged in August 2016 after allegation were made that Sturm violated firm policies by soliciting loans. VisionPoint stated that no funds were received by Sturm and the loan was not made. No other details concerning this activity were reported.
According to Sturm’s brokercheck records Sturm disclosed an outside business activity – Generations Wealth Advisors. 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”. Often times brokers who engage in this practice use outside businesses in order to market their securities.
Sturm entered the securities industry in 1998. From January 2009 through March 2011 Sturm was associated with Securities America, Inc. From February 2011 until December 2013, Sturm was registered with Broker Dealer Financial Services Corp. Thereafter, from November 2013 until February 2016 Sturm was associated with InvestaCorp, Inc. From January 2016 until August 2016, Sturm was associated with LPL. Finally, since September 2016, Sturm has been registered with Berthel, Fisher & Company Financial Services, Inc. out of the firm’s Perry, Iowa office location.
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.
The investment fraud attorneys at Gana LLP have represented hundreds of investors in securities related disputes including 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.