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Regulatory Sanctions

Broker Barred for Providing False Testimony

September 7, 2018

By Howard Haykin


When reading this case, I wondered aloud: Why did this broker bother to lie to FINRA officials during an investigation into his apparent, yet relatively innocuous, violative conduct? Perhaps he had a death wish, or maybe he never considered the consequences of perpetuating a lie.


A broker, who had 28 years’ experience with 4 firms, apparently threw his career away when he was caught lying to FINRA during an investigation into sales of private securities away from the firm with which he was associated.  After providing a false declaration and then false on-the-record testimony, the decision to bar this individual was an easy ‘slam dunk’ for FINRA officials.


FINRA FINDINGS.    Over a 5-month period in 2017, while associated with SA Stone Wealth Management, the broker solicited investors to purchase promissory notes in Woodbridge Mortgage Investment Funds, a purported real-estate investment fund. Ultimately, 4 individuals purchased $343,500 of these notes to 4 individuals, for which the broker earned over $10,000 in commissions. However, the broker never provided notice to SA Stone before participating in these private securities transactions - and he obviously never received firm permission to engage in these sales. [Violations of FINRA Rules 3280 and 2010.]


In January 2018, in response to a request for information, the broker provided a signed declaration falsely stating that his participation in the sale of a Woodbridge promissory note occurred after his association with SA Stone had ended. In March 2018, the broker provided false on-the-record (“OTR”) testimony to the same effect. [Violations of FINRA Rules 8210 and 2010.]


This case was reported in FINRA Disciplinary Actions for August 2018.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2017055476801.