Sunil Sachdeva of Norcross, Georgia was fined $10,000 and suspended for participating in outside business activities while willfully concealing the information from his employer.
An employee of FINRA member MetLife Securities Inc. (“MetLife”) since 1986, from 2003 to July 2013, Sachdeva held an ownership interest in, and was a managing member of, six different limited liability companies (“LLCs”) along with numerous of his MetLife clients. The six LLCs owned various rental properties that would eventually be sold for profit. Sachdeva received payments from these final sales, as he was a managing member with an ownership interest.
Sachdeva’s duties with the LLCs included managing the finances, paying bills, collecting information for tax purposes, and making everyday business decisions. Sachdeva never disclosed his ownership interest or participation in the operation of these LLCs to MetLife, his employer.
FINRA rules clearly state that no employee of a registered FINRA member may receive compensation from any business activity outside the scope of his work without prior written notice to his employer.
Sachdeva failed to inform MetLife of his participation with the LLCs on four annual compliance questionnaires from 2009 to 2012, willfully violating FINRA rules. Sachdeva told his superiors in Annual Compliance Reviews that he disclosed any outside activities on his Uniform Application for Securities Industry Registration (“Form U4”), which was false, as his Form U4 was never updated.
FINRA requires that Form U4’s be current at all times. The Form U4 is published on BrokerCheck, an online stockbroker database FINRA maintains, and investors use BrokerCehck to decipher whom they are willing to trust with their money. Sachdeva’s failure to update his Form U4 withholds important information from his investors and potential customers.
Sachdeva’s involvement in outside business activities with his MetLife clients and his failure to disclose the information to MetLife puts his investors at risk. Because Sachdeva is convincing his customers to invest in these LLCs, they are embarking on an investment that does not have any company oversight or procedures to keep Sachdeva in check as the LLCs have been completely hidden from MetLife.
Sachdeva’s involvement in these six outside business activities and his failure to inform MetLife cost him a $10,000 fine and six month suspension from associating with any FINRA member in any capacity.
If you think your financial advisor has broken rules governing the securities industry or acted outside of his authority, you may have a claim. Contact Investor Defense Law to see if you can recover your losses.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington recover losses caused by stockbrokers, financial advisers, or investment firms. To learn more, contact an investment fraud attorney at 800.487.4660.