FINRA Bars Advisor for Raising $11 Million in Unapproved Private Investments

Posted on April 11th, 2025 at 1:00 PM
FINRA Bars Advisor for Raising $11 Million in Unapproved Private Investments

From the desk of Jim Eccleston at Eccleston Law

The Financial Industry Regulatory Authority (FINRA) has barred a 21-year industry veteran for engaging in unapproved private securities transactions totaling $11 million. The ban was finalized in a FINRA Acceptance, Waiver, and Consent letter (“AWC”), as reported by AdvisorHub.

According to the AWC, between March 2020 and January 2023, the advisor recommended and facilitated 19 securities transactions tied to various business ventures, including a flooring company, an upscale furniture retailer, a mobile home park, and a real estate development project. FINRA reported that he solicited investments from 27 individuals, 22 of whom were his clients.

During this period, the advisor, who was associated with LPL Financial and its affiliated advisory firm Independent Advisor Alliance (IAA), received $173,000 in compensation from these businesses for consulting work, management services, and investor referrals.

However, the AWC states that he failed to notify or obtain written approval from LPL before engaging in these private securities transactions, a direct violation of FINRA rules.

In addition to engaging in unapproved private investments, FINRA found that the advisor sent more than 2,250 messages related to securities business through an unapproved personal email and cellphone. According to AdvisorHub, the regulator determined that he violated FINRA rules governing recordkeeping and the requirement that advisors adhere to high ethical standards.

AdvisorHub reports that this enforcement action comes as FINRA considers updates to its rules governing outside business activities and private securities transactions, potentially altering firms’ oversight responsibilities.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

July 11, 2025
FINRA Advances Proposal to Allow Limited Use of Performance Projections

The Financial Industry Regulatory Authority (“FINRA”) is moving forward with a proposal that would give broker-dealers limited ability to market performance projections and targeted returns under specific conditions.

July 10, 2025
SEC Permanently Bars Brite Advisors USA Over Custody Rule Violations and Undisclosed Conflicts

The SEC has permanently barred Brite Advisors USA from operating as an investment adviser, citing serious custody rule violations and undisclosed conflicts of interest tied to its offshore affiliate, as reported by Financial Advisor News.

July 9, 2025
UBS Confirms Data Breach After Cyberattack on External Vendor

UBS Group AG has confirmed that a cyberattack on one of its third-party suppliers resulted in stolen company information, though no client data was compromised.