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

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