Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisors Clement Chichester (Chichester) and Brittney Sias (Sias), in October 2017, were terminated by their firm, Western International Securities, Inc. (Western International) based on allegations that they accepted a FINRA sanction. Chichester and Sias were barred from the industry by FINRA after FINRA requested documents and information and they failed to provide FINRA with the requested documents and information after initially providing partial responses to a previous request in connection with FINRA’s investigation of their alleged receipt of funds from a customer of the firm.
At this time it is unclear the extent and scope of Chichester’s and Sias’ private securities activities. Chichester CRD lists that he is engaged in insurance as an outside business activity. 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”.
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.
Chichester entered the securities industry in 1984. From June 2010 until October 2011 Chichester was associated with U.S. Bancorp Investments, Inc. From February 2012 until October 2017 Chichester was associated with Western International out of the firm’s Westlake Village, California office location.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein 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.