Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker James Stockton (Stockton) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Stockton was employed by Dempsey Lord Smith, LLC at the time of the activity. If you have been a victim of Stockton’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a final customer complaint on November 06, 2024.
Without admitting or denying the findings, Stockton consented to the sanctions and to the entry of findings that he invested $1,430,000 through private securities transactions and did not provide advance written notice to his member firm to engage in these transactions. The findings stated that Stockton did not make these investments through his firm as they were not securities offered by the firm, and the transactions did not involve firm customers. Stockton also falsely responded to a question about whether he had participated in private securities transactions without prior written approval on a firm compliance questionnaire.
Our law firm has extensive experience representing defrauded victims when their advisors accept loans from clients or conduct securities sales through OBAs. The sale of unauthorized investment products, fraudulent schemes that disguise misused funds, and other deceptive practices are collectively known in the industry as “selling away,” a serious breach of securities laws. In finance, “selling away” occurs when a financial advisor recommends investments in companies, promissory notes, or other securities without the approval of their broker’s affiliated firm. Some of these investments may appear legitimate, but they often lead to Ponzi schemes or advisors engaging in fund misappropriation.
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. Each firm is obligated to enforce measures that oversee brokers by monitoring advisors’ conduct and their interactions with clients. 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.
Stockton entered the securities industry in 1988. Stockton has been registered as a Broker with Dempsey Lord Smith, LLC since 2022.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.