The investment lawyers of Gana LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Thomas Stamborski (Stamborski) working out of Palatine, Illinois alleging that the broker failed to disclose certain changes to an outside business activity. According to the FINRA regulatory action (FINRA No. 2015044783401) Stamborski consented sanctions in the form of a permanent bar because he failed to provide documents and information requested by FINRA during the course their investigation into allegations concerning his resignation from his member firm, LaSalle St Securities, LLC (LaSalle St). LaSalle St allowed Stamborski to resign after it was alleged that he failed to update an Outside Business Activity with his firm when a material change occurred.
As a background, the providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible outside business activities and private securities transactions – a practice known in the industry as “selling away”. At this time it unclear the nature and scope of Stamborski outside business activities. However, according to Stamborski’s public records his outside business activities includes Axis Financial Corporation. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices.