FINRA Sanctions LPL Stockbroker For Selling Away
Eric Jason Savell of Roseville California a stockbroker formerly employed by LPL Financial LLC has been fined $10,000.00 and suspended for five months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that (1) Savell engaged in outside business activities without disclosing them to LPL Financial and (2) Savell engaged in private securities transactions without apprising the firm and obtaining the firm’s authorization. Letter of Acceptance Waiver and Consent No. 2018060898601 (July 18, 2019).
According to the AWC, Savell serviced the account of Customer A both at LPL Financial and at Customer A’s previous financial institution. Evidently, in 2016, Savell discussed with Customer A that there were alternative investments available to the customer outside of LPL Financial which included investments in startups. The AWC stated that Customer A was eventually introduced by Savell to Company X, which was currently going through a software development phase. Evidently, the customer was made aware that Savell knew the Chief Executive Officer of that startup, and that Savell advised that company.
Savell ultimately persuaded the customer to meet with Company X’s Chief Executive Officer regarding investments. The AWC stated that Customer A then sold her investments at LPL, executed a stock purchase arrangement with Company X, and bought $160,000.00 in securities in the startup. The AWC stated that LPL Financial was never made aware of either Savell’s discussions with the customer or his assistance with the customer’s purchase of Company X securities.
The AWC stated that after the customer made the 2016 purchase of securities in Company X, Savell commenced working for the company and had been compensated $10,000.00 monthly. FINRA stated that Savell’s working relationship with Company X persisted through March of 2017; however, during this period, Savell never told LPL about this arrangement.
FINRA stated that Savell was required to notify LPL Financial in writing regarding the purchase of Company X securities by Customer A. Apparently, there had been no information provided by Savell to the firm regarding his role in the transaction effected outside the firm’s auspices. Consequently, FINRA found Savell’s private securities transactions to be violative of FINRA Rule 2010 and 3280.
Additionally, Savell had been required to abide by the firm’s policies relating to any working relationship he maintained with an entity outside the scope of his employment with LPL Financial. FINRA noted that at least between August of 2016 and March of 2017, Savell’s arrangement with Company X, in which he was compensated $10,000.00 a month, had not been disclosed by him to the firm in writing. FINRA determined that Savell’s activities in this respect were violative of FINRA Rules 2010 and 3270.
Savell’s employment with LPL Financial has been terminated as of August 2, 2017.