South Florida Arbitration & Litigation Lawyer Blog
Outside Business and Selling Away Misrepresentation and Fraud FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
March, 2012:
Beccah Leigh Boman (CRD #1413701, Registered Supervisor, North Oaks, Minnesota) submitted a Letter of Acceptance, Waiver and Consent in which she was fined $5,000, suspended from association with any FINRA member in any capacity for four months and ordered to pay $64,792, plus interest, in restitution to investors. Without admitting or denying the findings, Boman consented to the described sanctions and to the entry of findings that she engaged in private securities transactions by recommending that her member firm’s customer and some other individuals invest in an investment company she had formed. The findings stated that Boman described the investment company, which was not a firm-approved investment, as a securities investment company that she and those who would invest in it owned. Boman told these individuals that if they invested in the company for three years, they would receive the greater of a 5 percent return per year or the return on the shareholder’s equity. The findings also stated that Boman issued investment contracts to the investors and, based on Boman’s recommendation, they invested $114,792 in the company. The investment contracts were converted into promissory notes that had the same obligations and terms as the original investment contracts. The findings also included that the investment contracts Boman issued to the investors obligated her to pay interest on their principal and repay them within three years or renew their contracts. After a certain date, Boman did not make any further interest payments on the principal the investors in the company had. The total principal the investors invested was lost. FINRA found that Boman did not give notice to, and receive approval from, the firm before recommending the investments or participating in these private securities transactions outside the regular scope of her employment with the firm. At the time Boman accepted the investors’ funds and issued the investment contracts, she knew that her firm prohibited its registered representatives from engaging in private securities transactions without prior firm approval. FINRA also found that Boman incorrectly answered “no” on the firm’s annual compliance questionnaire regarding if she had engaged in any personal private securities transactions the firm’s compliance department had not previously approved.
The suspension is in effect from January 17, 2012, through May 16, 2012. (FINRA Case #2009018794001).