Private Securities Transactions and Selling Away FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
Mark Jason Carpenter (CRD #4506491, Registered Representative, Ann Arbor, Michigan) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Carpenter failed to respond to FINRA requests for information and to provide on-the-record testimony. The findings stated that Carpenter engaged in private securities transactions by recommending and selling securities to customers without notifying his member firm in advance. Carpenter sold the securities through a registered investment adviser that engaged in fee-based asset management and financial planning. Carpenter was the president of the investment adviser. The findings also stated that the investments, in the form of promissory notes called oil bond trading notes, had maturity dates of less than nine months; however, Carpenter convinced the customers to renew the investments repeatedly for aggregate periods exceeding nine months. Carpenter also sold a customer investments in a condominium and hotel development in which he convinced her to re-invest her principal and interest in successive condo notes. The customers lost their entire investments. The findings also included that Carpenter failed to disclose his outside business activities to his firm; Carpenter failed to disclose that he had formed, and was the president of, a registered investment adviser. (FINRA Case #2009019964301).