The investment lawyers of Gana LLP are investigating a customer complaint brought before the Financial Industry Regulatory Authority (FINRA) against Gerald “Jerry” Tagge (Tagge) working out of Omaha, Nebraska alleging the sale of $125,000 in promissory notes. 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”. In addition to the promissory note complaint there have been two other customer complaints against Tagge.
At this time it unclear the nature and scope of Tagge’s outside business activities and private securities transactions. However, according to Ingros’ public records his outside business activities include the d/b/a he operates out of Tagge Rutherford Financial Group, an insurance business, and real estate related business. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices.
Tagge entered the securities industry in 1991. Since August 2006 Tagge has been associated with Cetera Advisors LLC.
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.