According to FINRA, Bentley Edward Blackmon was fined $5,000 and suspended for three months on March 14, 2022, for participating in a private securities transaction without providing prior written notice to his member firm.

Blackmon introduced a firm customer to the issuer of a private placement offering and informed the customer he intended to invest in the offering himself. He participated in a telephone conference with the customer and issuer about the offering and coordinated a wire transfer of $195,000 from the customer's firm account to facilitate the customer's initial investment.

After making his own investment, Blackmon disclosed it to the firm. However, he did not disclose that he had also facilitated the customer's investment. Subsequently, Blackmon coordinated two additional wire transfers totaling approximately $250,000 for the customer's additional investments in the offering. Blackmon did not receive any commissions from the securities sales.

Private securities transactions must be disclosed to firms even when representatives receive no compensation. The requirement exists because firms need to supervise all securities-related activities to ensure suitability, conduct due diligence, and protect investors from fraud.

By failing to disclose his role in facilitating the customer's investments, Blackmon deprived his firm of the opportunity to evaluate whether the investment was suitable for the customer, conduct due diligence on the offering, and assess potential conflicts of interest arising from Blackmon's personal investment in the same offering.

This case illustrates that selling away" violations occur even without commission payments. The key issue is engaging in securities transactions outside firm supervision. When representatives personally invest in offerings they recommend to customers