According to FINRA, Maurice Lawrence Naylon III was fined $5,000 and suspended from association with any FINRA member in all capacities for 45 business days for engaging in an outside business activity without firm approval.

Naylon engaged in an outside business activity as owner of a company that offered structured settlements even though his member firm did not approve his request to participate in the activity. Despite the firm's denial of approval, Naylon continued to own and operate the company, sat on its Board of Directors, and served as its Vice President, Secretary, and Treasurer.

During this time, Naylon also appeared on the company's marketing materials and engaged with its clients regarding potential business. His involvement was substantial and ongoing, not a passive or minimal participation. Additionally, Naylon falsely certified on annual compliance questionnaires that he had not engaged in any outside business activities that were not approved by the firm.

The requirement to obtain firm approval for outside business activities exists so firms can evaluate potential conflicts of interest, determine whether activities may involve securities transactions requiring firm approval, and ensure activities do not interfere with the representative's duties to securities customers. When firms deny approval, they have determined that the activity is inappropriate or incompatible with the representative's securities employment.

Naylon's conduct was particularly serious because he not only engaged in the activity without approval, but continued after his firm specifically denied approval and then falsely certified on compliance questionnaires that he had no unapproved activities. This pattern shows deliberate disregard for firm policies and regulatory requirements, compounded by false attestations.

The 45-business-day suspension reflects multiple violations: engaging in the activity without approval, continuing after denial, holding multiple leadership positions, and providing false information on compliance questionnaires. For investors, this case illustrates that firms have the authority to deny outside business activities they deem inappropriate, and representatives who disregard these denials demonstrate poor judgment and disrespect for supervisory authority. The suspension is in effect from July 17, 2023, through September 18, 2023.