According to FINRA, Robert Watson Vial was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 30 days for engaging in outside business activities without providing prior written notice to his member firm.

Vial and other individuals formed a company to pool their funds for investment purposes. Through his personally owned corporation, Vial signed the company's shareholder agreement and was a sole shareholder. He served as a director and the corporate secretary of the company. The company's shareholders, including Vial, expected to receive returns from the company's investment activities.

Vial actively participated in the company's operations. He attended a meeting where the shareholders agreed to wire $350,000 to an asset manager to invest, with Vial contributing a portion of that amount through his personally owned corporation. Vial also conducted due diligence on the asset manager. The company and the asset manager entered into a Management and Deposit Agreement, committing to provide funds to the asset manager's escrow agent for placement into asset enhancement transactions. The asset manager subsequently filed for bankruptcy, likely resulting in a loss of the invested funds.

Despite his roles as director and corporate secretary, his financial contribution through his corporation, his due diligence activities, and his participation in investment decisions, Vial never provided prior written notice to his member firm about these outside business activities. FINRA rules require such disclosure to enable firms to supervise their representatives, identify conflicts of interest, and assess time commitments.

Vial's case is similar to those of his co-investors Lance Baraker and Stephen Robert Green, who received identical sanctions for their roles in the same investment company. Vial's violation was arguably more serious because he actually contributed funds through his corporation, demonstrating a greater financial stake in the venture.

The 30-day suspension reflects that the activities did not involve Vial's firm customers. However, this case demonstrates that forming and operating investment entities, particularly when contributing capital and serving as an officer, constitutes outside business activity requiring disclosure. Investors should ask their advisors about outside business involvements to understand potential conflicts.