SagePoint Stockbroker Sanctioned For Selling Away
Frederic Thomas O’Hara (also known as Ted O’Hara) of Burnt Hills New York a stockbroker formerly registered with SagePoint Financial Inc. has been fined $10,000.00 and suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that (1) O’Hara engaged in undisclosed outside business activities and private securities transactions (2) O’Hara lied about his discussions with customers of SagePoint in regards to outside investments and (3) O’Hara disseminated materials to a customer which failed to outline investment risks and which prevented the customer from having an adequate basis to evaluate the investment. Letter of Acceptance Waiver and Consent No. 2017054659401 (Mar. 16, 2020).
According to the AWC, during the time that O’Hara was associated with Berthel Fisher, he was designated as a director for Company 1 which was an outside enterprise. The AWC stated that financial advice was provided to Company 1’s other directors and its founder by O’Hara. He was compensated for his role as the director of Company 1 by being issued 250,000 shares of its stock. O’Hara was still Company 1’s director when he transitioned from Berthel Fisher to SagePoint. The stockbroker did not report his outside business activities with Company 1 to his employer. FINRA found that O’Hara violated FINRA Rules 2010 and 3270.
FIRNA stated that O’Hara was also selling away. From 2012 to 2015, he partook in at least four private securities transactions without disclosing them to SagePoint. Those transactions involved five of SagePoint’s customers who collectively invested $53,000.00 in Company 1. The AWC stated that the stockbroker corresponded with customers about their investments and introduced them to Company 1’s chief compliance officer. Customers also received promotional materials and subscription agreements from O’Hara. The AWC also stated that O’Hara helped facilitate customers’ purchases of Company 1’s investments. At no point was SagePoint provided any advanced notice from O’Hara regarding his private securities transactions. FINRA found that the stockbroker violated Rules 2010 and NASD Rule 3040 in this respect.
FINRA revealed that O’Hara also lied to SagePoint compliance personnel regarding the private securities transactions. The AWC indicated that SagePoint asked him if he and his customers discussed Company 1. O’Hara responded by stating that he never discussed it. FINRA determined that his statement was false as he discussed the investments with those customers who purchased shares. O’Hara violated FINRA Rule 2010 in this respect.
The AWC revealed that a customer of SagePoint was provided a promotional DVD by O’Hara regarding Company 1. The DVD failed to disclose the risks of making investments in Company 1. From April of 2013 to April of 2018, that customer was also provided a spreadsheet containing the valuation of Company 1’s securities without a necessary explanation of the valuations and without disclosing sources. FINRA stated that these materials prevented the customer from having an adequate basis to evaluate the investments. FINRA found that O’Hara violated FINRA Rules 2210 and 2010.
O’Hara has been identified in four customer initiated investment related disputes containing allegations of his misconduct while employed by NYLife Securities Inc., Next Financial Group and SagePoint Financial. A customer initiated investment related complaint involving O’Hara’s conduct was settled for $62,000.00 in damages based upon allegations of O’Hara’s failure to add riders to two annuities that he sold to the customer. On September 16, 2016, another customer initiated investment related complaint involving O’Hara’s conduct was settled to resolve allegations of misrepresentations concerning the features and fees of investments.