According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Mitchell Bloom (Bloom), formerly associated with Cetera Advisor Networks LLC (Cetera), and operating under the d/b/a name Bloom Financial, LLC was terminated by Cetera in November 2017. Bloom was accused by Cetera of violating firm’s policies and the representative participated in a private securities transaction and engaged in an outside business activity without the firm’s prior approval.
Thereafter in February 2019 FINRA barred Bloom from the securities industry. FINRA alleged that Bloom consented to the sanction and to the findings that he refused to appear for FINRA on-the-record testimony in connection with its investigation of the reasons for the termination of his employment from Cetera. FINRA found that Cetera had filed a Form U5 stating that in violation of the firm’s policies he participated in a private securities transaction and engaged in an outside business activity without the firm’s prior approval. Bloom’s failure to respond to FINRA drew an automatic bar from the industry.
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”. At this point is unclear what securities or business activities Bloom was engaged in. His public disclosures state that he was engaged in Bloom Life, LLC selling annuities and Alterna Card Services – a sales and marketing company.
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.
Bloom entered the securities industry in 1987. From February 2011 until November 2017 Bloom was associated with Cetera out of the firm’s Westminster, Colorado 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.