FINRA requires employees of FINRA-member firms to disclose all outside business-related activities to the member firm. FINRA’s Department of Enforcement investigated Lewin and found she participated in three private securities transactions by soliciting at least one her customers to invest approximately $6 million in three Chinese pharmaceutical-related companies. According to FINRA, Lewin did not disclose her customer’s investment in the outside companies to JP Morgan.
To make matters worse, Lewin lied to JP Morgan when it inquired whether she had recommended these investments to her customer. Indeed, JP Morgan filed a Uniform Termination Notice for Securities Industry Registration and reported the following: “[t]he Firm concluded that oral and written statements by [Lewin] were inconsistent with emails and documentation reviewed.” Lewin’s lack of candor undoubtedly led to her significant suspension from the financial industry for a minimum of two years.
Based upon the foregoing misconduct, FINRA alleges Lewin violated NASD Conduct Rule 3040 and FINRA Rule 2010. 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 lost money investing with Lewin through JP Morgan, 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.