On May 9, 2018, the Financial Industry Regulatory Authority, Inc. (FINRA) barred Brandon Carl Rudolph from associating in any capacity with firms registered with FINRA. FINRA registers and regulates securities brokers and brokerage firms.
FINRA announced the bar in a Letter of Acceptance, Waiver and Consent (AWC). In the AWC, FINRA said it barred Rudolph when he declined to respond to a written request for information during FINRA’s investigation. FINRA was investigating allegations that Rudolph, while employed by Chelsea Financial Services, participated in “private securities transactions away from Chelsea.”
Brandon Carl Rudolph entered the securities industry as a General Securities Representative in January 2014. He was registered in that capacity with Capital City Securities, LLC from August 2014 through November 2014, with Chelsea Financial Services from December 2014 through December 2016, and with Wealthforge Securities, LLC from January 2017 through September 2017.
According to FINRA records, Brandon Rudolph publicly disclosed many outside business activities:
- Independent Insurance Agent 2012,
- Savant Advisor Group (registered investment advisor),
- Sooner Than Later LLC,
- Resolute Capital (investment related, full-time sales), and
- Mojave Capital (loan officer, investment related, paid commission).
Private Securities Transactions and Selling Away
Brokerage firms must perform due diligence of, and approve, the securities that their brokers may offer to clients. “Private securities transactions” occur when brokers sell, underwrite, or promote in any other way transactions involving securities that are not on their firms’ lists of approved securities. Brokers must obtain approval from their firms before participating in private securities transactions, and failure to do so is a securities violation known as “selling away.”
Private securities transactions often involve unregistered, alternative investments that possess great risks, while paying brokers higher commissions than approved securities. Selling away often involves particularly risky, illiquid investments. Not infrequently, selling away involves fraud. Brokers selling away may misuse the reputation and scrutiny of their firm to sell securities not approved by the firm.
Firms may be liable for private securities transactions, even if unaware they occurred. Firms must review private securities transactions disclosed to them, and if they approve them, record them on their books and supervise them as if the firm was executing the transaction. Firms must also establish and implement reasonable procedures to detect and prevent selling away.
Additionally, firms must investigate all red flags of selling away. A significant red flag that should be investigated is a broker engaging in many outside business activities, particularly if investment related.
If you suffered losses while investing with Brandon Carl Rudolph, call Marquardt Law Office LLC at (312) 945-6065 to speak with a securities attorney for a free case evaluation. You may be able to recover your losses.
Marquardt Law Office LLC is a securities law firm located in Chicago, IL that represents clients nationwide on a contingency basis to recover losses caused by misconduct such as fraud and negligence.