Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Noel Carino (Carino), formerly associated with General Securities Corp., in November 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.
In November 2018 FINRA alleged that Carino consented to the sanction and bar from the industry after he refused to provide documents and information requested by FINRA in connection with its investigation into whether he engaged in outside business activities without written notice to his member firm, whether he engaged in private securities transactions without written notice to or approval from the firm, and whether he reported all outside brokerage accounts in which he had an interest to the firm.
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 time it is unclear the nature and scope of Carino’s activities. Carino’s disclosures include outside business activities (OBAs) including B & N Investments, LLC and Fidelity Wealth Management LLC. At this time it is unclear whether the unapproved products involve any of these entities.
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.
Carino entered the securities industry in 1999. From August 2006 until October 2017 Carino was associated with General Securities Corp out of the firm’s North Kansas City, Missouri 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.