Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Thomas Vilord (Vilord), formerly associated with brokerage firms Summit Brokerage Services, Inc. (Summit Brokerage) and SagePoint Financial, Inc. (SagePoint). According to brokercheck, FINRA found that Vilord consented to the sanction that he participated in undisclosed private securities transactions involving more than $347,500 in unregistered corporate debenture notes sold to customers of his member firm. FINRA found that Vilord assisted these customers in making the investments by preparing transaction paperwork and providing the customers with information about the company issuing the notes. FINRA also stated that Vilord lacked a reasonable basis to recommend the notes because he failed to conduct adequate due diligence on the offering because Vilord’s knowledge of the company was limited to his conversations with the company’s owner, information contained on the company’s website, and Google searches.
The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”. Often times brokers who engage in this practice use outside businesses in order to market their securities.