Advisor Xerxes Mullan Sanctioned By Regulator Over Undisclosed Securities Dealings – Investor Recovery Options

shutterstock_155045255-289x300The law offices of Gana Weinstein LLP are currently investigating claims that advisor Xerxes Mullan (Mullan) has been accused by The Financial Industry Regulatory Authority (FINRA) of engaging in undisclosed outside business activities (OBAs) and private securities transactions.  According to records kept by FINRA Mullan was employed by Purshe Kaplan Sterling Investments (Purshe Kaplan) through June 2019.  If you have been a victim of Mullan’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, the regulator sanctioned Mullan after he consented to the sanction that he participated in private securities transactions involving approximately $6 million in total sales without his member firm’s knowledge or approval.  FINRA found that Mullan disclosed his role at a registered investment advisor to his firm but that Mullan did not provide prior written notice to the firm of his participation in the securities offerings. In addition, FINRA also found that Mullan falsely certified on the firm’s annual compliance questionnaires that he was not involved in any private securities transaction that had not been previously disclosed to the firm.

Mullan’s BrokerCheck also reveals several disclosed OBAs including Avestar Capital Partners, One motel condo, several rental properties, among other disclosures.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs.  The sale of unapproved investment products – is 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.

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.

Mullan entered the securities industry in 2002.  From April 2003 through March 2017 Mullan was associated with Merrill Lynch.  From March 2017 through June 2019 Mullan was registered with Purshe Kaplan out of the firm’s New York, New York 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.

Contact Information