In La Mesa, California, financial advisor J. Randall Gladden has been suspended from the brokerage business for a full year due to his involvement in the Church Fund.
Mr. Gladden used to work for Securities Equity Group, an affiliate of Select Portfolio Management, an investment advisory firm.
So what did Mr. Gladden do to get suspended? According to settlement documents he signed with the Financial Industry Regulatory Authority (FINRA), Mr. Gladden conducted a private securities offering in Church Development Fund, LLC (a Washington LLC) and Church Fund, LLC, raising over $2 million from investors. These funds were supposed to provide refinance lending to churches for building projects and other capital campaigns.
The problem? Mr. Gladden apparently hid his involvement with the Church Funds from his employer, Securities Equity Group.
Broker-dealers have an obligation to reasonably supervise their financial advisers wherever they are working in financial markets, even if they are doing so outside the brokerage firm. Accordingly, financial advisors are required to notify their employer when they engage in an “outside business activity,” and setting up, soliciting for, and running the Church Fund definitely qualifies!
Obviously, a broker-dealer cannot supervise an investment related outside business activity if they don’t know about it, and that was the case here. It is unclear whether any investors have lost money investing in the Church Fund.
If you have questions about investment losses, the securities litigation attorneys at Investor Defense Law LLP may be able to help, and offer free consultations.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington State recover investment losses. We understand investment fraud and know how to sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud attorney at 800.487.4660.