In this case, FINRA barred a Minnesota-based Registered Rep from the industry after he failed to respond to FINRA requests for information (RFI's) and on-the-record testimony.  However, the nature of the RR's original violation - a different twist to conducting outside business - did not warrant such severe discipline. Securities Career Path. Joel Arthur Hulke was first employed in the securities industry in 1994.  From 9/17/07 until 5/19/09, he served as an RR (Series 7) with Financial Network Investment Corporation ("FinNet"), while also being employed with United Prairie Bank ("Bank").  FinNet and the Bank maintained a contract whereby the FinNet provided investment products and financial services to customers of the Bank. FinNet filed a U5 terminating  Hulke's association with the firm on 6/16/09 - "due to violations of firm policies related to delivery of annuity policies, prompt submission of client stock certificates to the firm's clearing broker and accepting blank signed customer annuity applications."  Three days later he joined up with another broker-dealer, but stayed only one month. FINRA Findings and Alleged Violations. While associated with FinNet, Hulke engaged in outside business activities through his association with an insurance company, but failed to notify his firm of this relationship or submit the required outside business activity disclosure form.  The firm discovered his outside association when it investigated Hulke’s reversal of a customer’s purchase of a fixed annuity entered through the firm on 12/30/08. It turned out Hulke had executed the same fixed annuity transaction for the same customer through the insurance company - for which he received a 4.9% commission for the purchase of the fixed annuity executed through the insurance company.  FinNet also discovered several other instances where Hulke sold annuity and life insurance policies to customers that resulted in additional commission payments to him outside of his firm.

NASD Conduct Rule 3030 provides that no person registered with a member "shall be employed by, or accept compensation from, any other person as a result of any business activity... outside the scope of his relationship with his employer firm, unless he has provided prompt written notice to the member... in the form required by the member."  Conduct Rule 3030 requires disclosure of all outside business activity, not just securities-related activity.

Ultimately, Hulke never cooperated with FINRA's  investigation. FINRA Sanction. The Sanctions Guidelines recommends a fine of $2,500 to $50,000, and a suspension of up to 30 business days where there are no aggravating circumstances.  Outside business activities involving aggravating circumstances can lead to a suspension of up to one year, or longer. No customers were injured as a result of Hulke's misconduct.  Also, upon Hulke's termination from the Bank, he agreed to reimburse the Bank for commissions on insurance products executed away from the Bank and the Firm.  Thus, aggravated circumstances were not involved in this case.  The decision to bar Hulke was based solely on his refusal to cooperate. For further details, go to:   [FINRA AWC #20090182956]    [Disciplinary Actions for November 2011]