According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Floyd Powell (Powell), formerly associated with MML Investors Services, LLC (MML Investors) in Albertville, Alabama has been accused by at least four clients of selling fraudulent investments.
In October 2018 a customer filed a complaint alleging that Powell, beginning in or around 2016, recommended that they invest in unregistered and fraudulent investment programs, made false representations, and failed to disclose material facts about the investments. The customer alleged over $3.1 million in damages. The claim is currently pending.
Also in October 2018 another customer filed a complaint alleging that Powell made inappropriate and unsuitable investment recommendations to and transactions beginning in early 2017. The claim is currently pending.
In August 2018 another client alleged violations of securities law regarding Powell’s recommendation to invest in unregistered and fraudulent investment program in July 2016. The claim alleges $250,000 in damages and is currently pending.
At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Powell’s public disclosures only state that he operates his business through a DBA called Faithway Financial Solutions LLC.
Often accompanied with either disclosed or undisclosed OBAs is the risk of the sale of unapproved investment products – a practice known in the industry as “selling away” – a serious violation of the securities laws. 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. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds. When advisors convert or misappropriate funds they often created businesses or other vehicles to serve as a cover for the theft of funds. However, federal securities laws and the FINRA rules require firms to 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.
Powell entered the securities industry in 1992. From March 1992 until March 2017 Powell was associated with MSI Financial Services, Inc. From March 2017 until February 2018 Powell was registered with MML Investors out of the firm’s Albertville, Alabama office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors 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.