Securities Lawyers Blog
Gevorg Daldumyan was recently barred from the financial industry by The Financial Industry Regulatory Authority (FINRA) over allegations that he failed to appear for testimony concerning condominium cooperative investments.
Daldumyan was registered with World Group Securities, Inc. (WGS) from 2002 through January 2012. Thereafter, Daldumyan was associated with Transamerica Financial Advisors, Inc. (Transamerica) or its predecessor. On June 19, 2012, Transamerica filed a Form U5 with FINRA stating that Daldumyan had voluntarily resigned on May 21, 2012, during an internal review by the firm arising from “information that the registered representative made investments in a condominium cooperative in Arnienia which appear not to have been disclosed to the firm.” Daldumyan is no longer associated with any FINRA member.
Due to the U5 Form filing, FINRA sent requests to Daldumyan for more information concerning the outside investments. By letter dated May 20, 2013, FlNRA staff requested that Daldumyan appear for on-the-record testimony. In response to the letter, Daldumyan stated that he would not appear for testimony at any time. Consequently, Daldumyan violated FINRA Rule 8210 by refusing to appear and provide testimony and was barred from association with any FINRA member firm.
The allegations against Daldumyan are consistent with allegations concerning outside business activities and a “selling away” violation. Selling away occurs when a securities broker solicits securities that were not first approved by the advisor’s firm. Selling away violates a number of securities laws including FINRA Rule 3040. The most common securities sold away from brokerage firms involve private placements, real estate related investments, and promissory notes. Investors are often unaware that the broker’s sales of these investments is improper and a violation of the securities laws. In addition, investors do not learn that the broker’s activities are wrongful until the investment scheme is either publicized, the broker is sanctioned, the investment stops paying interest, or the broker stops returning client calls.
Brokerage firm’s confronted by selling away claims typically respond to complaints by claiming ignorance to the broker’s wrongful actions. However, under FINRA Rule 3010, firms have an obligation to supervise their employees. The attorneys at Gana Weinstein LLP are experienced in investigating claims concerning failure to supervise outside business activities. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free of charge and the firm is only compensated if you recover.