- March 15, 2020
- Network 1 Financial Securities
Raymond A. Thomas (CRD # 1675282) was a Financial Advisor at Network 1 Financial Securities in Brooklyn, NY. Raymond A. Thomas has been in the securities industry since 1997 and has worked for 16 brokerage firms, including six (6) that have been expelled from the industry by FINRA.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on March 6, 2020, FINRA filed an enforcement action against Raymond A. Thomas, alleging that he violated rules and regulations regarding outside business activities. Outside business activities are closely monitored by brokerage firms because of the concern regarding “selling away.”
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.
According to the FINRA Complaint against Raymond A. Thomas, “Thomas was named a respondent in a FINRA complaint alleging that he engaged in outside business activities through a company he formed and controlled without providing prior notice to his member firm, written or otherwise. The complaint alleges that Thomas functioned and held himself out as an officer, director, and employee of the company. Thomas caused the company to enter into a number of agreements, including a consulting agreement with an international venture capitalist. Many of those agreements show that Thomas had the reasonable expectation of compensation for the activities he performed on behalf of the company and he was, in fact, compensated for the outside business activities he performed for it. Thomas opened bank accounts in the company’s name, used those bank accounts to receive numerous third-party wire deposits from entities and individuals with whom the company conducted business, and thereafter withdrew cash from the accounts or used the proceeds to pay for his personal expenses. The complaint also alleges that Thomas repeatedly provided false or misleading information to FINRA in an effort to conceal that he was engaged in outside business activities. During a branch examination, Thomas falsely told FINRA that he did not participate in any outside business activities. Likewise, when FINRA requested that Thomas identify all bank accounts that he controlled, for which he had signatory authority, or in which he had a beneficial interest, Thomas did not identify any of the bank accounts that he had established for the company, even though he had withdrawn nearly $100,000 from those accounts in the preceding 14 months. Finally, when FINRA took Thomas’ sworn testimony, he falsely testified, among other things, that his mother had created the company and that he did not have control of or signatory authority for any of its bank accounts.”
For a copy of the FINRA Complaint, click https://www.finra.org/sites/default/files/fda_documents/2017056561101%20Raymond%20A.%20Thomas%20CRD%201675282%20Complaint%20va.pdf
In addition, Raymond A. Thomas was terminated by Network 1 Financial Securities in March 2018 after an investigation revealed that “Mr. Thomas failed to provide records that were requested by the Firm in violation of the Firm’s WSPs. This resulted in the termination of Mr. Thomas.”
For a copy of Raymond A. Thomas’ CRD, click https://brokercheck.finra.org/individual/summary/1675282#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, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., 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.