- August 30, 2019
- Calton & Associates
- Capital Financial Services
Justin Mitchell (CRD # 5177794) is a former Financial Advisor at Capital Finanical Services in Baton Rouge, Louisiana. Justin Mitchell has been in the securities industry since 2007 and previously worked at LPL Finanical. Since 2019, Justin Mitchell has been registered with Calton & Associates.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in August 2019, FINRA sanctioned Justin Mitchell, suspending him for one month and imposing a fine, for the following alleged misconduct:
“Without admitting or denying the findings, Mitchell consented to the sanctions and to the entry of findings that he engaged in an outside business activity involving the sale of nutritional supplements without providing prior written notice to his member firm. The findings stated that Mitchell participated in organizing and forming the company, owned a percentage interest in it, executed its operating agreement, participated in board meetings, and made management decisions for it. The findings also stated that Mitchell made false statements to his firm on annual compliance questionnaires concerning his outside business activities.”
This FINRA investigation stems from an employment termination by LPL for “violation of Firm policy regarding outside business activities.” Outside business activities are business interests in which a Financial Advisor is engaged that do not relate to his or her work for the employing brokerage firm. Brokerage firms are obligated to supervise outside business activities to ensure that Financial Advisors do not cause brokerage firm clients to participate in their outside business ventures. This is referred to 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.
For a copy of Justin Mitchaell’s CRD, click https://brokercheck.finra.org/individual/summary/5177794#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.
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.