James A. Rosebrough Jr. of Gilbert, Arizona was fined and suspended for 30 days after participating in outside business ventures with a client, and withholding the information from his employer.
Between 2011 and 2013, Mr. Rosebrough participated in two outside business activities without providing written notice to his member firm. Mr. Rosebrough formed two separate companies with a Firm client. Mr. Rosebrough was a partner of the businesses, therefore he received monetary compensation. Consequently, on September 12, 2013, Mr. Rosebrough’s employer filed a complaint with FINRA indicating that he had been terminated for “violation of firm policy regarding outside business activities.”
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. Furthermore, Firm policies prohibit Mr. Rosebrough from engaging with customers in unrelated business operations, whether or not he received compensation for doing so.
Mr. Rosebrough’s involvement in an independent business activity with a client, his failure to disclose the information to his employer, and lying on a Firm questionnaire by answering “no” to the question of whether he was engaged in any outside business activity, puts investors at great risk. Since he opened the business with a Firm client, it is safe to assume that Mr. Rosebrough attempted to convince Firm customers to invest or work with his companies. Mr. Rosebrough’s conduct put investors in danger, as they are making investments that do not have any oversight by the Firm, or procedures to keep Mr. Rosebrough in check; the companies have been completely hidden from the firm.
Mr. Rosebrough’s involvement in this outside business activity, as well as his failure to inform his employer, cost him a 30 day suspension from associating with any FINRA member and a $5,000 fine.
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.