According to FINRA, James Craig Etter was assessed a deferred fine of $10,000 and suspended from association with any FINRA member firm for four months for participating in undisclosed private securities transactions and an undisclosed outside business activity.

Etter raised $110,000 from investors through private securities transactions without prior disclosure to his firm. He solicited investments in an entity he founded and controlled, answered questions about the investments, and collected investment paperwork and funds. The investors were not customers of his firm and later received their funds back.

Despite the transactions, Etter inaccurately attested on a firm compliance questionnaire that he had not been engaged in private securities transactions in the prior 12 months.

Additionally, Etter participated in an undisclosed outside business activity by providing business development and due diligence services to a solar equipment company, for which he received approximately $66,000 in compensation.

This case illustrates the importance of complete disclosure of outside activities. Representatives must notify their firms of both private securities transactions and compensated outside business activities. The false compliance questionnaire response compounds these violations by actively concealing the activities from the firm.

While no investors lost money in the private securities transactions, the lack of disclosure prevented the firm from evaluating potential conflicts of interest and ensuring appropriate oversight. The four-month suspension reflects the multiple violations and the false attestation.