- January 20, 2023
- Cantella & Co.
Clinton Byrd (CRD#: 4673625) is a previously registered Broker and previously registered Investment Adviser.
He entered the securities industry in 2003 and previously worked for Cantella & Co., Morgan Stanley and Co., and Morgan Stanley DW, Inc.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in January 2023, FINRA sanctioned Clinton Byrd with a civil and administrative penalty/fine of $5,000, and a suspension from all capacities for nine months beginning January 17, 2023 and ending October 16, 2023. The FINRA sanction states, “Without admitting or denying the findings, Byrd consented to the sanctions and to the entry of findings that he participated in a private securities transaction without providing prior written notice to his member firm. The findings stated that Byrd caused a musical production company, which he owned, to issue a promissory note to the daughter of a firm customer, who signed the note on behalf of the customer’s family. Byrd, acting on behalf of his musical production company, signed a promissory note through which his company borrowed $550,000 from the customer’s family. Funding for the principal amount of the note came from the customer’s firm brokerage account. Pursuant to the terms of the promissory note, Byrd’s company used the note to finance its acquisition of a collection of historical memorabilia. Acting outside the scope of his employment with the firm, Byrd drafted the promissory note, which was a security, transmitted it to the customer’s daughter, and both Byrd and the customer’s daughter signed the note. Although the note required Byrd’s company to make quarterly interest payments and repay the principal within one year, the company made no such payments. Byrd did not provide written notice to the firm before causing his company to issue the promissory note, nor did he obtain written approval from the firm. When subsequently asked on annual firm attestation forms whether he had referred anyone to any investment opportunities outside of the firm, Byrd falsely responded that he had not.”
For a copy of the FINRA sanction, click here.
In addition, Clinton Byrd has been the subject of four other disclosures, including customer complaints and employment disclosures:
- May 2021 — “Loss of Confidence – failure to report customer complaint related to an Outside Business Activity. Failure to report a rent to own property as an Outside Business Activity.” Clinton Byrd was discharged by Cantella & Co., Inc.
- January 2021 — “Claimant alleges that an LLC owned solely by Mr. Byrd executed a promissory note on December 7, 2012 and that he failed to repay the principal when it was due on December 7, 2013. It is unclear whether the Claimant was a customer at the time of the transaction. Claimant alleges that the funds were used to purchase an art collection. Claimant alleges unsuitable recommendations and breach of fiduciary duty.” The customer dispute is pending.
- January 2021 — “Claimant alleges that an LLC owned solely by Mr. Byrd executed a promissory note on December 7, 2012 and that he failed to repay the principal when it was due on December 7, 2013. It is unclear whether the Claimant was a customer at the time of the transaction. Claimant alleges that the funds were used to purchase an art collection. Claimant alleges unsuitable recommendations and breach of fiduciary duty.” The customer dispute was settled for $450,000.
- June 2007 — “FINANCIAL ADVISOR ENGAGED IN UNAPPROVED FINANCIAL RELATIONSHIPS WITH CLIENTS.” Clinton Byrd was discharged by Morgan Stanley & Co., Inc.
For a copy of Clinton Byrd’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
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