Stephen Brown and James Peter Goetz Jr., of Pittsford, New York, stockbrokers formerly associated with Merrill Lynch, Pierce, Fenner & Smith, were suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a FINRA Office of Hearing Officers Extended Hearing Panel Decision containing findings that: Brown engaged in undisclosed outside business activities and Goetz effected undisclosed private securities transactions. Department of Enforcement v. Brown, et al., No. 2014042690502 (Aug. 2, 2017).

Particularly, compliance disclosures were reportedly administered to Brown, where he neglected to inform his firm about his involvement with Iron Smoke and Lorax – business dealings that FINRA determined to be outside business activities rather than simply passive investments held away from the firm. Apparently, he failed to inform his firm about customers’ investments in his outside business activities, including Drive Safe, Sweetwater, OncoPep, The Clean Energy Companies, Iron Smoke and Lorax. Customers EP and AC reportedly assumed director or principal roles with the outside businesses. FINRA found that Brown’s non-disclosures in that regard constituted violations of FINRA Rule 2010.

Additionally, FINRA found that Brown failed to inform his firm about his elevated involvement with Lorax, which FINRA concluded should have been classified as a private securities transaction. Consequently, FINRA found Brown’s conduct violative of NASD Rule 3040. Brown was also found by FINRA to have violated NASD Rule 3030 and FINRA Rules 3270 and 2010 considering his failure to disclose his management of Lorax as an outside business activity. Brown was fined $125,000.00 and received a nine-month suspension for his misconduct.

Goetz evidently invested in The Clean Energy Companies and Iron Smoke, and was found by FINRA to have pursued five securities transactions away from Merrill Lynch without obtaining approval. Consequently, FINRA found that Goet’z conduct was violative of NASD Rule 3040 and FINRA Rule 2010. Goetz was fined $25,000.00 and received a one-month suspension from FINRA.

FINRA Public Disclosure reveals that Brown has been subject of four customer initiated investment related disputes containing allegations of his misconduct while employed with Merrill Lynch. Specifically, on April 26, 2010, a customer filed an investment related written complaint involving Brown’s conduct, based upon allegations that he failed to abide by the customer’s instructions in reference to mutual fund and equity transactions effected in the customer’s account.

Subsequently, on April 7, 2012, a customer filed an investment related written complaint regarding Brown’s activities, based upon allegations that Brown made misrepresentations to the customer concerning commodity option products. On October 5, 2012, another customer initiated investment related written complaint involving Brown’s conduct was settled for $510,905.00 in damages resting upon allegations that Brown made misrepresentations to the customer concerning the risk factors of commodity options. Further, on May 9, 2012, a customer initiated investment related written complaint regarding Brown’s activities was resolved for $13,462.93 in damages grounded on allegations of misrepresentation.

Brown and Goetz were both terminated from Merrill Lynch on September 9, 2014. Since October 20, 2014, they have been registered with Stifel, Nicolaus & Company, Inc.

Guiliano Law Group

Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

For more information concerning common claims against stockbrokers and investment professionals, please visit us at stockbrokerfraud.com

To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com

Tags:

No comments yet.

Leave a Reply

Name (required)

Email (will not be published) (required)

Website