Articles Tagged with Form U5

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 Financial Industry Regulatory Authority (FINRA) recently barred broker Stephen Michael Brown (Brown) for failing to comply with FINRA’s requests for information concerning allegations that Brown engaged in the unlawful sale of securities.  Specifically, at least two customers had brought complaints against Brown alleging that Brown had solicited them to invest in private real estate investments in violation of industry rules.

Brown was formerly registered with FINRA firm LPL Financial Corporation (LPL Financial) from 1989 through May 2009.  Thereafter, Brown became associated with Brewer Financial Services, LLC until November 2010.  Finally, from November 2010, until May 2011, Brown was an associated person of Best Direct Securities, LLC (Best Direct) a currently inactive FINRA firm.  Brown’s public disclosures list Brown as the owner of Steve Brown Ent., a company engaged in real estate business.

The accusations made against Brown are consistent with a “selling away” securities violation.  Brokers are required to have their firms approve all securities transactions they participate in, even private financial transactions.  Thus, when a broker fails to notify the firm of securities activities he or she “sells away” from the firm.  Selling away is prohibited under FINRA Rule 3040, as well as other securities laws. The most common securities products solicited in selling away schemes are private placements and promissory note.