FINRA Bars Broker Chase Casson For Failing to Respond to Inquiries Over Private Transactions

shutterstock_145368937The Financial Industry Regulatory Authority (FINRA) recently barred broker Chase Casson (Casson) alleging that Casson failed to provide documents and information to FINRA in response to demands made to investigate the broker’s activities. On various dates in August and September 2014, FINRA sent Casson a request for documents concerning allegations that he participated in a private securities transactions. The details concerning the exact nature of the alleged transaction and Casson’s role are not yet fully known.

The allegations against Casson are consistent with a potential “selling away” securities violation. 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. Under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees in order to detect and prevent brokers from offering such products. In order to properly supervise their brokers each firm is required to establish and maintain written supervisory procedures and implement such policies in order to monitor the activities of each registered representative. Selling away often occurs in environments where the brokerage firms either fails to put in place a reasonable supervisory system or fails to actually implement that system and meet supervisory requirements.

In selling away cases, investors are unaware that the advisor’s investments are either not registered or not real. Typically investors will not learn that the broker’s activities were wrongful until after the investment scheme is publicized or the broker simply shuts down shop and stops returning client calls.

According to Casson’s BrokerCheck records, the advisor was registered with Morgan Stanley Smith Barney from June 2010, until August 2011. Thereafter, Casson was associated with Trustmont Financial Group, Inc. (Trustmont) from September 2011, until September 2014. On September 5, 2014, Trustmont terminated Casson’s employment and on September 9, 2014, Trustmont filed a Form U5 stating that Casson was terminated for failing to cooperate with the firm’s requests for information in connection with an ongoing FINRA inquiry.

Investors who have suffered losses through Casson investment recommendations may be able recover their losses through arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away, Ponzi schemes, and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.

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