Former Sagepoint Financial, Inc. Broker, Troy Baily, Supsended by FINRA For Six Months and Fined $5,000 For Allegedly Engaging In Unapproved Private Securities Transactions
Troy Baily (CRD# 4458930) was registered advisor at Sagepoint Financial, Inc. in Omaha, NE. Troy Baily was in the securities industry from 2001 to 2018. Troy Baily previously worked for AXA Advisors, LLC, Proequities, Inc., Ameritas Investment Corp., Vision, and Centarus Financial, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on October 19, 2020, FINRA sanctioned Troy Baily for allegedly engaging in undisclosed and unapproved private securities transactions. FINRA suspended Troy Baily for six months and fined him $5,000.
According to the FINRA sanction: “Without admitting or denying the findings, Baily consented to the sanctions and to the entry of findings that he engaged in undisclosed and unapproved private securities transactions. The findings stated that Baily solicited investors to purchase securities in Future Income Payments, LLC (FIP). FIP represented itself as a structured cash flow investment, claiming to purchase pensions at a discount from pensioners and then selling a portion of those pensions as a pension stream to investors. FIP generally promised investors a 7% to 8% rate of return on their investment. Baily sold $210,000 in FIP purchase agreements to four investors, including three who were customers of his member firm. Baily received a total of $8,900 in commissions in connection with these transactions. Respondent did not provide written notice to his firm prior to participating in the transactions involving FIP, nor did he obtain written approval from the firm. FIP ceased business, owing nearly $300 million in unpaid investor payments. In an indictment, the United States charged FIP and its owner with conspiracy to engage in mail and wire fraud related to FIP’s operations.”
For a copy of Troy Baily’s FINRA disciplinary action details click https://www.finra.org/sites/default/files/fda_documents/2019063916701%20Troy%20R.%20Baily%20CRD%204458930%20AWC%20va.pdf
Often times, Financial Advisors who participate in private securities transactions are said to be “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.
In addition to the FINRA sanction, Troy Baily has been the subject of two costumer complaint disclosure alleging sales practice misconduct:
• August 2019—”improper recommendation of structured cash flow products in 2017 ans 2018.” Alleged damages are $135,000 and the matter remains pending.
• May 2008—”UNSUITABLE RECOMMENDATIONS OF VARIABLE ANNUITY, LIMITED PARTNERSHIPS, AND A FIXED ANNUITY.” The claim was denied.
For a copy of Troy Baily’s CRD, click here
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 firstname.lastname@example.org.