Louisiana Registered Representative agrees to Sanctions to Resolve Allegations of Breaking FINRA Rules in Relation to the Sale of Woodbridge Promissory NotesMonday, March 4, 2019
On February 15, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) against former registered representative Thomas Sova for allegedly violating FINRA Rules by participating in private securities transactions without prior approval from his associated brokerage firm.
According to his FINRA BrokerCheck report, Sova was associated with Hornor, Townsend & Kent, Inc. (HTK) in Baton Rouge, Louisiana from October 2007 to June 2018. He was discharged from the firm for “violation of firm policies and procedures regarding disclosure of outside business activities relating to the outside sale of an unapproved and unregistered security.” Shortly after his termination, FINRA Department of Enforcement began investigating these allegations.
FINRA alleges in the AWC that between May 2016 and July 2016, Sova sold $250,000 in Woodbridge Group of Companies LLC (Woodbridge) promissory notes to three investors, one of whom was an HTK customer and received $5,000 in commissions for these transactions. Woodbridge is now a well-known Ponzi scheme in which thousands of investors lost billions of dollars.
FINRA asserts that Sova violated FINRA Rules 3280 and 2010 for failing to provide notice and obtain prior written approval from HTK to participate in these private securities transactions. By signing the AWC, Thomas Sova consented, without admitting or denying the allegations made by FINRA, to a five-month suspension, a $5,000 fine, and disgorgement of the $5,000 in commissions he received for the transactions, plus interest.
Oftentimes brokerage firms can be held liable for the brokers’ misconduct if they failed to supervise them while registered at the firm. If you lost money due to your broker’s negligence, you may be able to recover from your broker or the brokerage firm where he or she was registered. Since 1998, the attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.