According to FINRA, Gerald Michael Taylor was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for three months for engaging in outside business activities outside the scope of his association with his member firm without providing prior written notice to the firm, for inaccurately stating his activities on compliance questionnaires, and for opening and maintaining an account at another firm without proper authorization.

Taylor served as the chief compliance officer of a local community bank and worked as an assistant professor of finance at a local college, receiving compensation for both positions. Despite these significant outside roles, he failed to provide the required written notice to his firm. The outside business activity rules require representatives to notify their firms of business activities outside their employment so firms can assess whether the activities create conflicts of interest, interfere with the representative's duties to the firm, or involve securities-related activities that should be conducted through the firm.

Taylor's positions as a bank compliance officer and finance professor both involve financial services and education, creating potential conflicts and raising questions about divided loyalties and time commitments. When Taylor submitted compliance questionnaires to his firm, he inaccurately stated that he did not receive compensation from any person or entity outside of his relationship with the firm. He also inaccurately stated on multiple conflict of interest questionnaires that he was not an officer in any other business entity, when in fact he served as chief compliance officer of the bank.

Additionally, Taylor opened an IRA at another firm in which securities transactions could be effected and in which he held a beneficial interest, without receiving prior written consent from his firm or notifying the other firm of his association. Rules requiring representatives to notify their firms of accounts at other firms exist to enable supervision and to prevent representatives from engaging in personal trading that could conflict with their duties or that could involve insider information. For investors, this case illustrates red flags to watch for when working with financial professionals. Representatives who hold multiple jobs, particularly in finance-related fields, may have divided attention and potential conflicts of interest. Investors should ask financial professionals about their other business activities and employment to assess whether conflicts exist. The fact that Taylor was a compliance officer at another financial institution while failing to comply with basic disclosure requirements at his securities firm is particularly concerning and suggests a lack of integrity. Investors can verify the background and outside activities of financial professionals through FINRA's BrokerCheck system, though it depends on representatives making accurate disclosures.