Subscribe to our mailing list

* indicates required







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.




Regulatory Sanctions

Non-Registered Employee Barred for Undisclosed Private Securities Transactions

October 20, 2017

by Howard Haykin


While non-registered associated persons may lack the financial sophistication of their registered counterparts, they nonetheless are obligated to comply with a firm's policies and procedures. They must provide advance notice to their employer if they want to participate in private securities transactions. And they must provide complete and accurate responses to Annual Compliance Questionnaires. THE BOTTOMN LINE: non-registered persons should not be an afterthought. In the case below, Goldman Sachs dealt with such employees no different from everyone else.


Emma Levin consented to be barred from the industry to settle FINRA charges that she participated in private securities transactions by recommending and facilitating the sale of limited partnership interests in a real-estate investment fund without providing prior notice to her member firm.


BACKGROUND.   Levin, a resident of East Brunswick, NJ, was an NRF (Non-Registered Fingerprint) person associated with Goldman Sachs from October 2013 through September 2016. She had worked in the firm’s technology division.


FINRA FINDINGS.    FINRA’s case against Ms. Levin addressed 3 distinct issues.


     Issue #1.   In August 2014 and July 2015, Levin participated in private securities transactions by recommending and facilitating the sale of limited partnership interests in the JPH Fund, a real-estate investment fund, to 2 investors for total proceeds of around $30,000. Before participating in these transactions, Levin failed to provide written notice to, or obtain prior written approval from, Goldman Sachs.


     Issue #2.   In February 2015 and February 2016, Ms. Levin compounded the situation by providing inaccurate responses on the Firm's annual attestations – i.e., Annual Compliance Questionnaires - concerning her participation in private securities transactions. Specifically, she falsely represented on the attestations that she had no "private investments or outside interests" and failed to disclose her participation in the JPH Fund.


     Issue #3.   From January 2015 through September 21, 2016 (the date of her termination), Ms. Levin assisted the JPH Fund in its material misrepresentations. While the JPH Fund had less than $200,000 in total assets under management during this period, she arranged for the Fund's website to include the following material misrepresentations – both of which were false:

  • "We currently manage over $47 million of our clients' assets"; and,
  • “We project to invest $75 million in real estate mortgages for 2015, which will earn our Investors $4.5 million in interest combined."


Among other things, these activities violated NASD Rule 3040 (replaced by FINRA Rule 3280), “Private Securities Transactions of an Associated Person.”


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 #2016051548501.