Florida Broker Fined, Suspended For Undisclosed Private Securities Transactions
Clinton F. Byrd (CRD#: 4673625) is a previously registered investment advisor and broker. From August of 2007 to June of 2021, Mr. Byrd was a representative of Cantella & Co. Inc, a brokerage firm in Tallahassee, Florida. In 2021, this broker was discharged from that firm after confidence was lost because of a failure to report outside business activities.
On January 9th, 2023, the Financial Industry Regulatory Authority (FINRA) found that Mr. Byrd violated his professional responsibilities in relation to outside business activities. He was fined and suspended. Here, our Miami private placement securities attorney discusses the disciplinary action taken against this former broker in more detail.
Broker Sanctions: Clinton F. Byrd Formerly of Cantella & Co. Inc.
Following his separation from Cantella & Co. Inc., FINRA initiated an investigation into the professional conduct of Florida securities broker Clinton F. Byrd. The agency determined that Mr. Byrd, through a musical production company that he owned, issued a promissory note to the daughter of one of the customer’s of his brokerage firm. Through the promissory note, Mr. Byrd’s company borrowed more than $500,000 from the family of the firm’s customer.
According to the terms of the promissory note in question, Mr. Byrd’s company was supposed to make quarterly payments. However, a year into the transaction, no such payments were made. Further, the private securities transaction was not disclosed to Mr. Byrd’s member firm, Cantella & Co. Inc—a violation of FINRA Rule 3040. Without admitting or denying any wrongdoing, the broker consented to FINRA’s penalties, including a $5,000 fine and a nine month suspension.
What to Know About FINRA Regulations and Selling Away
FINRA is a self-regulatory organization that oversees broker-dealers and registered representatives in the United States. Under FINRA regulations, brokers are prohibited from “selling away” from the member firm without proper approval.
Selling away refers to the improper practice of a registered representative selling securities or investments to customers without the knowledge or approval of their brokerage firm. Most often, this occurs when a representative promotes or sells investment products/opportunities that are not offered or approved by the firm, such as private placements, real estate partnerships, or other speculative ventures.
Under FINRA Rule 3040, all registered representatives must disclose outside business activities and private securities transactions to their member firm before participating in them. They can only move forward with such a transaction if they obtain approval from their broker-dealer. If approval is offered, the broker-dealer becomes responsible for overseeing the representative’s activities.
Contact Our Miami, FL Securities Fraud Attorney for a Confidential Consultation
At Carlson & Associates, P.A., our South Florida FINRA arbitration lawyer has the professional expertise that you can count on. If you or someone you know sustained significant trading losses in a private securities transaction, we are more than ready to help. Call us now or contact us through our website to set up your completely confidential initial case review. With an office in Miami, we provide FINRA arbitration representation in Miami-Dade County and throughout South Florida.
Source:
brokercheck.finra.org/individual/summary/4673625
