Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against brokers Neal Moon (Moon) and Natalie Fogiel Moon (Fogiel). According to the FINRA complaint, from February 2012 to August 2015, Moon participated in nine private securities transactions and Fogiel, his wife, participated in six private securities transactions in which six customers invested a total of $2.64 million in three different entities. FINRA claimed that Moon and Fogiel failed to provide Waddell and Reed (Waddell), their brokerage firm, with prior written notice of their participation in the private securities transactions.
Among the businesses that Moon and Fogiel are accused of soliciting clients to invest in include BOXX Technologies, NMN BOXX, Total Operating LLC, TO Investments, Hoffbrau Steaks, and CCBRAU, Ltd
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.
Moon entered the securities industry in 1999. From October 2009 through October 2015 Moon was associated with Waddell & Reed out of the firm’s Dallas, Texas office location. In September 2015, Moon was permitted to resign from the firm over allegations of involvement in undisclosed private securities transactions.
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.