FINRA Suspends Former Mora WM Securities Broker, Paul D Weiss, For Allegedly Engaging In Unapproved Outside Business Activities
Paul David Weiss (CRD # 1849504) was a Financial Advisor at Mora WM Securities in Miami, FL. Charles Euler has been in the securities industry since 1989 and previously worked at Global Investor Services and Colony Park Financial Services.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on April 22, 2020, FINRA sanctioned Paul David Weiss, suspending him for a period of ten months and fining him $20,000. The suspension was due to Paul David Weiss allegedly engaging in undisclosed outside business activities and soliciting customers to invest in these outside ventures.
Outside business activities are closely monitored by brokerage firms and regulators to ensure that Financial Advisors do not involve customers in investment opportunities that are not approved by the broker’s employing brokerage firm. This practice is known as “selling away.”
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.
According to the FINRA sanction, “The findings stated that Weiss became a principal in a limited liability company in order to market and raise funds for the purchase of a property. To effect the purchase of the property, Weiss arranged for a loan of $800,125 from a fund that customers of his member firm were invested in. After the purchase of the property, Weiss obtained $119,000 in connection with the purchase and remained an indirect owner of the entity that purchased the property. Weiss also facilitated and processed payments for a nursing home that a firm customer owned. For this activity, Weiss received monthly compensation totaling approximately $14,664. Weiss did not provide any notice of these outside business activities to his firm, even though he received the firm’s annual certification. The findings also stated that Weiss, in connection with one of his outside business activities, sent a promotional email to a potential investor that failed to comply with FINRA’s content standards for member communications with the public. Weiss sent an email to an investment advisor, in an effort to have the investment advisor invest or raise funds to purchase the property. The email did not provide a fair and balanced discussion of potential risks arising from the potential investment. It also contained unwarranted and/or promissory claims. Further, in the email, Weiss claimed that investors would receive a particular level of distributions on a monthly basis after the sixth month of the investment. However, according to the offering memorandum that Weiss attached to the email, distributions would only be made from available cash flow. Weiss’ email also contained a projection of the amount of profit participation investors could expect to earn and the total cash return to investors. The investment advisor who received Weiss’ email did not invest himself or obtain any other investments for the purchase of the property.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/201805853701%20Paul%20David%20Weiss%20CRD%201849504%20AWC%20VA.pdf
For a copy of Paul David Weiss’ CRD, click https://brokercheck.finra.org/individual/summary/1849504#disclosuresSection
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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