According to FINRA, Bryan Noonan was barred from the securities industry for refusing to produce information and documents requested by FINRA in connection with its investigation into whether he engaged in undisclosed outside business activities and private securities transactions.
Outside business activities (OBAs) and private securities transactions, often called "selling away," are common sources of investor harm in the securities industry. When registered representatives engage in business activities or securities transactions away from their member firm without disclosure and approval, the firm cannot supervise those activities to protect investors. This creates significant risks, as many investment fraud schemes involve representatives who solicit customers to invest in opportunities outside the firm's oversight.
FINRA's investigation sought to determine whether Noonan engaged in such undisclosed activities. When FINRA requested documents and information about his activities, Noonan refused to provide them. This refusal violated FINRA Rule 8210, which requires associated persons to cooperate with FINRA investigations.
The refusal to cooperate is particularly concerning given the nature of the underlying investigation. If Noonan had not engaged in undisclosed OBAs or private securities transactions, providing information to clear his name would have been straightforward. The refusal to provide information when accused of activities that often harm investors raises serious concerns about what the documents and information might have revealed.
FINRA cannot function effectively if individuals can simply refuse to provide information about their activities. The regulatory system depends on the ability to investigate potential misconduct and gather facts. When someone refuses to cooperate, FINRA must impose severe sanctions—typically a bar from the industry—to maintain the integrity of the regulatory process.
For investors, this case highlights the risks of investing in opportunities presented by your financial advisor outside of their brokerage firm. If your advisor suggests an investment opportunity that is not offered through their firm, ask whether the firm is aware of and has approved the transaction. Be especially cautious about investments in private companies, real estate ventures, or other opportunities that seem separate from your regular brokerage account.
The bar from the industry is permanent and prevents Noonan from working in any capacity with a FINRA member firm. This sanction protects investors from an individual who refused to provide information about potential undisclosed activities that could have harmed customers. When industry participants obstruct investigations into activities that commonly result in investor losses, removal from the industry is the appropriate response.
