Articles Tagged with NYLife Securities

shutterstock_155045255-289x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Walter Starghill (Starghill), in March 2017, was discharged by brokerage firm Lincoln Investment over allegations of Starghill’s “participation in a private securities transaction in violation of Firm policy.”  In the industry all securities transactions, private investments, loans, or other financial transactions with the investing public must be disclosed and approved by the firm before the broker can engage in them.

At this time it is unclear what outside business activity Starghill was engaged in.  According to Starghill’s disclosures he was involved with TSG Transportation LLC – a transportation service.  FINRA requires brokers to disclose their outside businesses because the risk to investors is that the broker will use such businesses to engage in unauthorized securities activities.  In addition, Starghill obtained a Series 6 license as opposed to a broader Series 7 license.  A Series 6 license is a very limited license that only allows brokers to sell variable annuities and open end mutual funds.  Sometimes brokers with Series 6 licenses engage in private securities transactions due to their limited license.

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”.

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shutterstock_93851422The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Jonathan Williams (Williams) (FINRA No. 20150452689) resulting in a bar from the securities industry alleging that Williams failed to provide FINRA staff with information and documents requested. The failure to provide those documents and information to FINRA resulted in an automatic bar from the industry. FINRA’s document requests related to the regulators investigation into claims the Williams falsified certain bank records and potentially commingled client funds in a bank account under his control.

FINRA’s investigation appears to stem from Williams’ termination from NYLife Securities LLC (NYLife) in March 2015. At that time NYLife filed a Form U5 termination notice with FINRA stating in part that the firm discharged Williams under circumstances where there was allegations that Williams commingled client funds. It is unclear the nature of the outside business activities from publicly available information at this time. However, from the three customer complaints filed against Williams potentially relating to these activities, the clients allege that Williams sold those customers CDs that were issued by Mid-Atlantic Financial and that the funds used to purchase these CDs were withdrawn from accounts with NYLife.

Williams entered the securities industry in 2000. From February 2006, until April 2015, Williams was associated with NYLife out of the firm’s Timonium, Maryland office.

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shutterstock_180735251The Financial Industry Regulatory Authority (FINRA) recently sanctioned and barred David Chu (Chu) concerning allegations Chu refused cooperate with requests made by FINRA in connection with an investigation into possible outside business activities and private securities transactions. Such activities are often referred to as “selling away” in the industry. According to FINRA BrokerCheck records Chu has no outside business activities listed. It is unclear what businesses or investments FINRA’s investigation concerns.

Chu entered the securities industry in 2004, when he became associated with NYLife Securities LLC (NYLife). Chu held a Series 6 license which is a license that only allows the broker to sell investment companies (i.e. mutual funds) and variable contracts products. On March 16, 2015, NYLife filed a termination notice (known as a Form U5) with FINRA disclosing that Chu was discharged from the firm under circumstances that included a notification from the SEC that the agency was reviewing Chu’s books and records including his outside business activities and private securities transactions. NYLife conducted its own review and believed that Chu’s activities exceeded the scope of his approved activities with the brokerage firm.

According to FINRA, in April 2015, the agency began investigating whether Chu had engaged in outside business activities by soliciting investments or promissory notes. As part of its investigation FINRA sent a request to Chu for certain documents and information. According to FINRA, Chu provided a partial response to FINRA but thereafter through subsequent communications stated on a call with FINRA staff that he will not cooperate with the investigation. Consequently, Chu was barred by FINRA.

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