BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Regulatory Sanctions
- Big Banks
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Frozen Custard Maker Violated FINRA’s Rules
by Howard Haykin
David Gott agreed to pay a $5K fine and to serve a 6-month suspension to settle FINRA charges that he sold 4 individuals at least $546,000 in private equity and debt investments without providing his member firm with prior written notice.
BACKGROUND. Gott, a resident of Tipton, IA, entered the securities industry in 1988 and has 26 years’ experience with 3 firms. He was registered with Ausdal Financial Partners from 2012 until October 2015, when he was U5’d following his resignation to focus on his ice cream business (as described more fully below). In November 2015, Ausdal filed an amended Form U5 to report that it had "determined that Mr. Gott did not give proper notification to the firm of investors who invested in his [outside business activity]." Gott has not been associated with a FINRA member film since leaving Ausdal. Instead, he works full time making and marketing gourmet frozen custard throughout Iowa and beyond.
FINRA FINDINGS. In 2013, Gott founded Gott Ice Cream, LLC, to manufacture and distribute premium frozen custard under the brand name "David's Famous." In November 2012, upon joining Ausdal, Gott requested and received written permission from the firm to engage in this business venture as an outside business activity.
However, the prospects of this business began to take off. So, between November 2014 and July 2015, and without providing written notice to Ausdal, Gott obtained at least $546,000 in financing for the business in the form of private equity and debt investments that Gott sold to 4 individuals. Gott received no selling compensation for arranging these investments, but his company, Gott Ice Cream, obviously benefited from them.
At all relevant times, Ausdal's pols and procedures regarding private securities transactions prohibited its registered reps from engaging in such transactions “without the prior express written permission of [Ausdal],'' and further required "[a]ssociated persons to provide written notice of their intention to participate in any private securities transaction before commencing such participation."
In doing so, Gott violated NASD Rule 3040 and FINRA Rule 2010.
This case was reported in FINRA Disciplinary Actions for September 2017.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015047392002.