According to FINRA, Partho Sarathi Ghosh was fined $10,000 and suspended for three months on January 18, 2022, after a NAC decision became final. The NAC modified sanctions imposed by an Office of Hearing Officers and dismissed the requalification requirement because Ghosh has not been registered for more than five years.

Ghosh was found in violation of FINRA rules by engaging in outside business activities without providing prior written notice to his member firm. Before becoming associated with the firm, Ghosh submitted an outside business activity request form, but the firm denied the request and directed him to dissolve his company. After dissolving that company but before registering with the firm, Ghosh formed and incorporated a new company under the same business model. Ghosh was the new company's sole owner and director.

This time, Ghosh neither informed the firm about the new company nor submitted an OBA request form for approval. He became a registered representative of the firm while continuing to engage in undisclosed business activities through his new company.

When Ghosh later submitted an annual supervisory questionnaire, he certified that he understood and complied with the firm's requirement to obtain prior written approval before engaging in outside business activities, and that he complied with submission of marketing materials for review and use of approved email addresses. In fact, Ghosh had not complied with these requirements.

Approximately two and a half months after registering, Ghosh submitted an OBA request for his new company. When asked for additional information, some of his responses contradicted his previous representations. The firm denied this OBA request. Despite the denial, Ghosh continued conducting the company's business. He voluntarily resigned approximately three and a half months after registering with the firm.

FINRA rules require representatives to provide prior written notice of outside business activities so firms can supervise these activities and identify potential conflicts of interest. When Ghosh formed a new company to continue activities the firm had already rejected, he deliberately circumvented the firm's supervisory authority.

For investors, this case demonstrates the importance of transparency in the advisor-firm relationship. Firms need to know about their representatives' outside activities to provide proper supervision and protect clients from conflicts of interest.