FINRA requires employees of FINRA-member firms to disclose all outside business-related activities and all investments recommended to customers to the member firm. FINRA’s Department of Enforcement investigated Murphy and found he participated in several private securities transactions. Specifically, FINRA alleged that in November 2013 Murphy sold $1.2 million of shares and warrants in a private placement to four individuals and one limited partnership. According to FINRA, Murphy did not disclose to TGP Securities that he had made a $1.2 million investment in a private placement for which TGP Securities was providing brokerage services and then resold those interests to other investors.
Based upon the foregoing misconduct, FINRA alleges Murphy violated NASD Conduct Rule 3040 and FINRA Rule 2010. For example, NASD Rule 3040 states no FINRA registered person may be an employee or receive compensation for outside business transactions unless he or she has provided prior written notice to their employer. Outside business transactions and selling away are prohibited activities because they serve to undercut the supervisory system implemented by FINRA-member firms and FINRA itself to protect the investing public.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damages investing in with Murphy while he worked for TGP Securities, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.