In October 2016, Richard Sampley (Sampley), a registered representative, settled a complaint with the Financial Industry Regulatory Authority (FINRA), which alleged he participated in outside business activities. Specifically, FINRA alleged Sampley solicited customers to invest in an early stage renewable energy company, without notice to his firm. Based upon these allegations, FINRA suspended Sampley for ten months and fined him $15,000.
Sampley (FINRA CRD No. 409802) entered the securities industry in 1974 as a general securities representative. From 2006 to 2013, Sampley worked for Morgan Keegan & Company, Inc. and then its successor Raymond James & Associates, Inc. (“Raymond James”). Sampley is no longer associated with any FINRA-member; however, he remains subject to FINRA’s jurisdiction.
FINRA requires employees of FINRA-member firms to disclose all outside business-related activities, private transactions and all investments recommended to any customers to the member firm. The unlawful business practice of recommending investments outside of a financial advisor’s firm is often referred to as “selling away.” 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.
FINRA’s Department of Enforcement investigated Sampley and alleged he solicited three customers to invest $357,000 in a renewable energy company (“BE”) via warrants. In June 2014, Sampley allegedly solicited another investor to purchase $2.5 million in BE warrants. According to FINRA, Sampley did not disclose these transactions to Raymond James and did not receive prior approval.
Based upon the foregoing misconduct, FINRA alleges Sampley 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. Here, Sampley did not disclose his participation in the sale of BE warrants to investors, and therefore, violated FINRA rules.
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 Sampley while he worked for Raymond James, 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 or complete our free case evaluator.