Financial Advisor, George McCaffrey, Barred By FINRA For Selling Away

The Wolper Law Firm is currently investigating claims against George McCaffrey, a former Financial Advisor at NTB Financial Corp. in Englewood, Colorado.  George McCaffrey has been in the securities industry since the 1970s and has worked for NTB Financial Corp. since the 1980s.

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on September 10, 2018, FINRA sanctioned George McCaffrey, barring him from the securities industry for a period of 18 months.  As part of regulatory settlement, FINRA made the following findings:

“Without admitting to or denying the findings, McCaffrey consented to the sanctions and to the entry of findings that without first providing notice to his member firm, he participated in 22 undisclosed private securities transactions in which nine investors, including one firm customer, purchased $1,775,000 in debt and equity securities. The findings stated that McCaffrey introduced the nine individuals to representatives of a greenhouse building and leasing company so they could invest in the company. The findings also stated that he reviewed and edited documents relating to the investments, forwarded investment-related documents to the customers, and communicated with the customers about their investments. Those investors purchased $1,775,000 in promissory notes of the greenhouse building and leasing company and preferred stock in one of the company’s affiliates. The findings also included that in connection with these transactions, the company paid $124,250 in commissions to an entity controlled by McCaffrey’s wife. FINRA found that the transactions were not executed through the firm , and McCaffrey did not give the firm prior written notice that he would be participating in them. FINRA also found that McCaffrey incorrectly indicated on the firm’s annual compliance questionnaire that he had not participated in any private securities transactions.

For a full copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2017056104701%20George%20L.%20McCaffrey%20III%20CRD%20847377%20AWC%20jm.pdf

Participation in outside business activities often leads to “selling away,” which is when financial advisors sell products and securities to clients that are not approved by the firm.   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.

If you or someone you know was a customer of George McCaffrey and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available.  The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.

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.