According to FINRA, Francis Cid was barred from association with any FINRA member in all capacities on January 28, 2022, for refusing to produce information or documents requested by FINRA.
FINRA's investigation focused on Cid's conduct concerning an entity that he controls. The information requests sought details related to Cid's potential participation in private securities transactions, disclosures made to investors concerning the entity, and matters related to the entity's registration status.
Private securities transactions - sometimes called "selling away" - occur when registered representatives engage in securities transactions outside the regular scope of their employment with their firm. FINRA rules require representatives to provide prior written notice to their firm before participating in private securities transactions. This requirement exists so firms can supervise these activities and protect investors from unsuitable investments or fraudulent schemes.
Questions about disclosures to investors and registration status are equally important. Securities offerings generally must be registered with the SEC unless an exemption applies, and investors must receive accurate information about their investments to make informed decisions.
Cid's refusal to produce requested information and documents prevented FINRA from investigating these important issues and determining whether investors were harmed. The duty to cooperate with regulatory investigations is fundamental - it enables FINRA to fulfill its mission of protecting investors and maintaining fair markets.
When registered persons refuse to cooperate with FINRA investigations, they face severe sanctions, typically including bars from the industry. These strong sanctions reflect the critical importance of cooperation with regulatory oversight.
For investors, this case serves as an important reminder to be cautious about investing in securities offered by your financial advisor outside of their firm. Such "selling away" transactions often lack proper supervision and may involve unsuitable or fraudulent investments. Investors should also verify their advisor's regulatory history through FINRA BrokerCheck and avoid working with individuals who have been barred from the industry.
