FMN Capital Corp. Investment Advisor and Broker Jeffrey Stanga Sanctioned by FINRA for Allegedly Selling Away
Jeffrey Stanga (CRD#: 6387255) is dually registered as an Investment Advisor and Broker at FMN Capital Corp. in Mission Viejo, CA. He entered the securities industry in 2014 and previously worked for Financial Management Network, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in March 2021, FINRA sanctioned Jeffrey Stanga with civil and administrative penalties of $10,000 and a 12-month suspension in all capacities, beginning April 5, 2021. The FINRA sanction states, “Without admitting or denying the findings, Stanga consented to the sanctions and to the entry of findings that he failed to fully disclose the nature of his outside business activities. The findings stated that prior to his association with the member firm, Stanga sold a private placement offering of membership units in connection with a residential real estate flipping business. Stanga provided written notice to the firm on his Form U4, describing his involvement as an “investor, gives advice/opinions on buying/fixing/selling residential homes,” but failed to fully disclose his role as “manager,” and that the business was an investment-related business. The findings also stated that Stanga participated in private securities transactions without providing the required written notice to, or receiving written approval from, the firm. Prior to his association with the firm, Stanga sold promissory notes to investors in connection with a real estate brokerage firm. After registering with the firm, Stanga participated in private securities transactions totaling $1,160,000 by facilitating the renewals of the real estate brokerage promissory notes he sold to investors prior to his association with the firm. Stanga facilitated the promissory note renewals for investors (one of whom was a firm customer) by acting as an intermediary between the investors and the real estate brokerage. Stanga received $28,359 in referral fees in connection with these private securities transactions.”
For a copy of the FINRA sanction, click here.
In addition, Jeffrey Stanga has been the subject of two customer complaints, including the following:
● January 2018—”Sold unsuitable product to client.” The customer dispute was settled for $46,000.
● January 2018—“Selling an unsuitable product 2010.” The customer was awarded $75,000.
For a copy of Jeffrey Stanga’s FINRA BrokerCheck, click here.
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.
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 email@example.com.
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