South Florida Arbitration & Litigation Lawyer Blog
Selling Away and Outside Business Activity Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
December, 2011:
Jason Sean Harrison (CRD #2628373, Registered Representative, Pearland, Texas) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $15,000 and suspended from association with any FINRA member in any capacity for one year. The fine must be paid either immediately upon Harrison’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Harrison consented to the described sanctions and to the entry of findings that he engaged in private securities transactions without providing notice, written or otherwise, to his member firm. The findings stated that Harrison facilitated investments in bonded life contracts an entity issued to his firm’s customers by bringing the investment opportunity to the customers’ attention and referring them to the entity’s salesperson. The customers subsequently invested a combined total of $150,000 with the entity, and Harrison received fees in the amount of $18,000 from the entity for the referrals, which were paid in the form of checks made payable to Harrison’s relative. The findings also stated that prior to referring his firm’s customers to the entity, Harrison had been told that the firm had prohibited its registered representatives from offering and selling the entity’s products due to concerns that the firm had about the products. The findings also included that Harrison ignored the prohibition, made several customer referrals to the entity, and collected undisclosed referral fees. The entity’s investment subsequently defaulted and all of the customers’ funds were lost. FINRA found that Harrison engaged in an outside business activity in that he received $2,500 in undisclosed compensation for a customer referral to a life settlement issuer business, without having provided notice to his firm.
The suspension is in effect from October 31, 2011, through October 30, 2012. (FINRA Case #2009018648901).