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 Regan and found he participated in at least three private securities transactions. Specifically, FINRA alleged that between March and September 2010, Regan sold three investors approximately $350,000 in private stock. According to FINRA, Regan verbally requested permission from NFP to refer customers to the outside investment before the transactions and was granted permission to do so, Regan’s participation exceeded the scope permitted by NFP.
Based upon the foregoing misconduct, FINRA alleges Regan 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 with Regan while he worked for NFP 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.