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Former LPL Financial Broker, Michael Tavel, Suspended by FINRA for 18 Months After Allegedly Participating in Private Securities Transactions Away from His Member Firm

Michael Tavel (CRD #6413) was a registered financial advisor at LPL Financial LLC from 2004-2019. Michael Tavel was also dually registered as an investment adviser.

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on December 9, 2020, Michael Tavel was suspended for 18 months and fined $20,000 for allegedly participating in securities transactions away from his member firm and recommending unsuitable investments to clients.

According to the FINRA sanction, “Without admitting or denying the findings, Tavel consented to the sanctions and to the entry of findings that he participated in private securities transactions away from his member firm without providing a written disclosure to the firm and he falsely attested to the firm that he had not solicited any unapproved private placements.”

For a copy of Michael Tavel’s FINRA disciplinary action details, click here.

Details of the Allegations Against Tavel

Tavel had been separated from LPL Financial LLC on March 25, 2019, after allegations he participated in a private securities transaction without prior notice to the firm, and he attempted to settle a customer complaint without prior notice to, or approval from the firm.

He was also separated from Charter Advisory Corporation on March 26, 2019, after it was alleged by the company’s custodian broker dealer, LPL Financial, that Tavel was being terminated by LPL Financial for violating several of the firm’s policies. These violations included personal securities transaction reporting, selling away, not reporting a customer complaint, and attempting to settle a customer complaint without the firm’s knowledge or approval.

Why Selling Away is a Problem for Investors

FINRA has strict prohibitions on financial advisors engaging in private securities transactions or selling securities and other investments to clients that are not offered through the brokerage by which they’re employed, also called “selling away”. These protections shield investors from securities that have not been vetted by the advisor’s employing brokerage firm through rigorous due diligence processes. Most brokerage firms provide advisors with a list of approved investments, products, and research that can be shared with clients. Any deviation on the part of the investment advisor from the approved investment or product list may be considered selling away.

In addition, Michael Tavel has one disclosed customer complaint, dated February 27, 2019, in which the customer alleged “that the registered representative made an unsuitable recommendation and misrepresented his return in connection with a memorandum of indebtedness.” The matter was settled for $25,000.

For a copy of Michael Tavel’s CRD, click here

Financial advisors are obligated under current laws and regulatory standards to recommend only those investments which are suitable to their clients’ needs and objectives. The financial advisor’s employing brokerage firm likewise has a legal and regulatory obligation to oversee the advisor’s sales practices and client relationships. To the extent that any of these duties are breached, the client may be entitled to a recovery of his or her investment losses.

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]