Broker Barred for Concealing Commissions From Native American Tribe: Enforcement

As a result of the firm's failure to apply available sales charge waivers, the firm estimates that eligible customers were overcharged by $766,295 for mutual fund purchases made since July 1, 2009.

Adviser Barred for Falsely Claimed SEC Registration Eligibility

The SEC barred from the industry the principal of an RIA for falsely claiming SEC registration eligibility.

According to the SEC's initial cease-and-desist order in August 2017 against Robert Wilson and his firm Black Diamond Asset Management, Wilson initially registered by claiming that Black Diamond had more than $583 million in assets under management and at least 26 discretionary accounts, but a year later changed the firm's Form ADV to claim eligibility as a midsize advisor with $25 million to $100 million in AUM domiciled in New York and/or Wyoming.

In reality, the SEC says, Black Diamond managed no marketable assets at the time and has never met the minimum requirements for investment adviser registration with the commission.

In addition, while Black Diamond was formed by Wilson in 2013 as a Wyoming limited liability company, it has "at all relevant times" been located at Wilson's address in New York, according to the SEC.

According to the SEC, the respondent electronically signed the Form ADV "under penalty of perjury."

FINRA Bars Broker Who Hid Outside Business Activities From Firm

FINRA barred James Randall Clay because he engaged in outside business activities without providing prior written notice to his member firm.

According to BrokerCheck, Clay was a broker at CUSO Financial Services at the time. Prior to that, Clay worked at U.S. Bancorp Investments and Edward Jones.

According to FINRA's findings, Clay used his relationship with an elderly customer to buy real estate from the customer under terms that benefited only himself.

Clay drafted and signed a handwritten agreement to purchase the customer's rental property for $1 million, with the customer financing the entire amount. Under the agreement, Clay also borrowed $500,000 from the customer to fund Clay's down payment on the property and improvements to it.

Clay established a limited liability company to manage the rental property and began collecting rent, according to FINRA. However, he never provided written notice of this outside business to his firm.

The findings also stated that after the customer's family complained to the firm, Clay falsely told the firm his sister purchased the rental property, and he was not personally involved in the purchase or subsequent management of the property.

Clay also provided the same false information to FINRA in response to requests for information and documents and during on-the-record testimony. This information was pivotal to FINRA's investigation, and Clay's misrepresentations were designed to conceal his misconduct and divert the investigation away from him, according to FINRA.

The FINRA decision barring Clay became final on Nov. 1.

— Check out Maxine Waters to Keep 'Watchful Eye' on Regulators on ThinkAdvisor.