According to FINRA, Robert Franklin Muller Jr. of Dallas, Texas was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for four months for participating in a private securities transaction without disclosure to or approval from his member firm.

Muller formed a limited partnership to raise capital for acquiring and operating a retail business franchise. As sole manager of the general partner, he sold $400,000 in limited partnership interests to six investors who were not brokerage customers of his firm.

While Muller did not receive selling compensation at the time of the sales, he expected future compensation in the form of cash distributions and service fees. He did not provide prior written notice to his firm of the limited partnership formation, the sales to investors, or his expected compensation.

Subsequently, Muller completed an annual compliance questionnaire without disclosing his involvement in the private securities transaction.

FINRA rules requiring disclosure of private securities transactions exist because such activities can create conflicts of interest, expose customers to unvetted investments, and may involve securities activity that should occur under firm supervision. Even when the investors are not firm customers, the broker's firm has a legitimate interest in knowing about and potentially supervising such activities.

The expectation of future compensation—even if not immediate selling commissions—means the transaction was "for compensation" under FINRA rules, triggering the prior approval requirement rather than just the notice requirement.

The suspension is in effect from April 21, 2025, through August 20, 2025.

Investors in Muller's limited partnership should understand that this investment was made outside of any regulatory supervision by his brokerage firm.