Former Investment Advisor and Broker at Merrill Lynch, Pierce, Fenner & Smith, Inc, Tyler Delahunt, Barred Indefinitely After Failing to Participate in FINRA Investigation After Allegations of Selling Away
Tyler Delahunt (CRD#: 4419594) was a previously registered Investment Advisor and Broker at Merrill Lynch, Pierce, Fenner & Smith, Inc., in Atlanta, GA. He entered the securities industry in 2001 and previously worked for PFS Investments, Inc.; Raymond James Financial Services, Inc.; Raymond James & Associates, Inc.; Merrill Lynch, Pierce, Fenner & Smith, Inc., and Morgan Keegan & Co., Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in January 2021, FINRA sanctioned Tyler Delahunt, barring him from all capacities indefinitely, beginning on January 25, 2021. The FINRA sanction states, “Without admitting or denying the findings, Delahunt consented to the sanction and to the entry of findings that he failed to respond to a FINRA request for information and documents in connection with FINRA’s investigation regarding whether Delahunt had solicited clients in a private securities transaction without approval of his member firm and whether he had accepted loans or other funds from clients without notice to his firm.”
For a copy of the FINRA sanction, click here.
In addition, Tyler Delahunt has been the subject of two disclosures, including the following:
● August 2020—”Conduct involving improper solicitation of clients related to an outside investment and participating in financial arrangements involving clients.” Tyler Delahunt was discharged by Merrill Lynch, Pierce, Fenner & Smith Incorporated.
● April 1998—”Using Plates Registered to Another.” The final disposition of these criminal charges was bail forfeiture.
For a copy of Tyler Delahunt’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.
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.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, other investments, financial situation and needs, and tax status; other factors to consider include the investor’s investment objectives, time horizon, liquidity needs, risk tolerance, and any other relevant details disclosed by the customer.
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.