According to FINRA, Brody Ralph Bray was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for six months for engaging in undisclosed outside business activities and distributing misleading investment-related communications.

Bray became an independent contractor for a company that provides subscription-based investment content for a fee, earning $77,500 in compensation for services that included providing investment and trade-related analysis and communications. He also failed to provide prior written notice about activities with two additional limited liability companies he formed. Bray conducted the company-related activities under a pseudonym and falsely attested on an annual compliance questionnaire that he had not engaged in any undisclosed outside business activities.

Representatives must provide prior written notice to their firms about outside business activities so firms can evaluate potential conflicts of interest, assess whether the activities involve securities transactions, and ensure proper supervision. By concealing these activities and using a pseudonym, Bray deprived his firm of the ability to conduct this evaluation and prevented required supervision.

The violations became more serious because the investment-related content Bray provided to the company was sent to its subscribers and violated FINRA Rule 2210 content standards. The communications contained exaggerated, unwarranted, promissory, and/or misleading statements or claims. When representatives create investment content outside of firm supervision, there is no compliance review to ensure accuracy and appropriateness, increasing the risk that communications will mislead investors.

The six-month suspension reflects multiple violations: undisclosed outside business activities, false attestations on compliance questionnaires, and distribution of misleading communications to the public. The use of a pseudonym and false compliance questionnaire responses indicate Bray knew his conduct was improper and deliberately concealed it.

For investors, this case highlights the risks of investment advice provided through subscription services that may not be subject to regulatory oversight. Investors should verify whether individuals providing investment recommendations are properly registered and supervised. The suspension is in effect from June 20, 2023, through December 19, 2023.