Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating Daniel Kasbar (Kasbar) bar from the securities industry. The Financial Industry Regulatory Authority (FINRA) recently brought an enforcement action (FINRA No. 2015045744901) against Kasbar alleging that between 2010 and 2015, Kasbar engaged in an outside business activity beyond the scope of the approvals provided by his FINRA member firm – also referred to as “selling away” in the industry – HD Vest Investment Services (HD Vest) and LPL Financial, LLC (LPL). On September 17, 2015 FINRA requested that Kasbar provide documents and information. Kasbar did not provide any of the requested documents and information drawing an automatic bar from the industry.
Kasbar entered the securities industry in February 2011. Between February 2011 and March 2014, Kasbar was associated with HD Vest. From March 2014 until June 2015, Kasbar was associated with brokerage firm LPL until he was discharged from the firm.
It is unclear from the regulatory filings what the nature of the outside business activities were but from publicly available information, Kasbar’s brokercheck disclosures reveal several outside business activities including Kasbar Financial, Daniel G. Kasbar & Company, Inc. – a general contracting company, Emerald Village Professional Plaza, Kasbar Consulting – a tax prep, accounting, bookkeeping firm, and A R K Construction Company, Inc.
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.
Investors who have suffered losses 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.