FINRA Bars Joseph Likens Over Private Securities Sales

shutterstock_138129767-300x199Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Joseph Likens (Likens).  According to brokercheck, in Likens failed to respond to FINRA’s requests for information resulting in a bar.  FINRA stated that Likens refused to appear for on-the-record testimony related an investigation into allegations that he may have engaged in private securities transactions.  At this time the scope of Likens activities and the specific investments are not reported.  However, Likens disclosed outside business activities involving PWA Network.

The FINRA investigation followed Likens’ termination from his previous employer LPL Financial LLC (LPL) in May 2016.  Likens worked out of a d/b/a Cornerstone Wealth Management.  At that time, Likens was terminated after allegations were made that he engaged in trading away from the firm.  In November 2016, a customer alleged that Likens sold away from the firm an investment made in 2011 causing $120,000 in damages.  The claim is currently pending.

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.

Likens entered the securities industry in 1998.  From April 2009 until January 2015 Likens was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated.  From January 2015 until May 2015 Likens was associated with LPL out of the firm’s Des Peres, Missouri 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.