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FINRA Barred Broker Who Sold Promissory Notes
July 29, 2011
A Utah-based Registered Rep with MML Investor Services began a chain of events and problems for himself and his customers with the sale of promissory notes. Bart Chad Christensen allegedly sold away from the firm $650,000 in a company's promissory notes to firm customers. He did not provide the firm with advanced written notice. FINRA found that things got really messed up from there.
- With anticipated interest payments from the promissory notes they purchased, some firm customers also purchased life insurance policies from Christensen and another RR through the broker-dealer.
- Christensen received direct commissions from the company related to the sale of the promissory notes as well as from the life insurance products.
- The company defaulted on its promissory note obligations and the customers lost their entire investment.
- Customers who also purchased life insurance based upon the expectation that they would receive interest payments from those investments had to relinquish their policies.
- The firm compensated these customers for the insurance premiums paid.
- The customers were not reimbursed for the losses incurred with the promissory notes.
- Christensen falsely reported on a firm annual compliance questionnaire that he had not been engaged in capital raising activities for any person or entity, had not been personally involved in securities transactions that the firm had not approved, and had not acted as an intermediary between a client and a sponsor for investments not available with the firm without the firm's approval.
- Christensen failed to respond to FINRA requests for documents and testimony.
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