According to FINRA, Hector Jesus Hernandez was barred from association with any FINRA member in all capacities for refusing to appear for on-the-record testimony requested by FINRA in connection with its investigation into his potential failure to disclose an outside business activity while he was associated with his member firm.

Registered representatives are required to disclose all outside business activities to their member firms so the firms can evaluate potential conflicts of interest and determine whether the activities should be restricted or prohibited. Outside business activities can create conflicts when they compete with the firm's business, involve securities transactions, or otherwise interfere with the representative's duties to clients.

When representatives fail to disclose outside business activities, firms cannot properly supervise them or protect customers from potential conflicts. FINRA's investigation sought to determine whether Hernandez had engaged in undisclosed outside activities and whether those activities created conflicts or harmed investors.

By refusing to testify about his potential failure to disclose outside business activities, Hernandez prevented FINRA from gathering facts about what activities he was engaged in, whether they were properly disclosed, and whether they created problems for customers. This refusal to cooperate is itself a serious violation warranting a permanent bar from the industry.

Investors should understand that their financial professionals may have outside business interests, but those interests must be disclosed to and approved by their firm. Undisclosed outside activities can create serious conflicts of interest where the broker prioritizes their outside business over client interests. Investors can ask their financial professional about any outside business activities and can check FINRA BrokerCheck for disclosure information and disciplinary history.