According to FINRA, William W. LeBoeuf was assessed a deferred fine of $12,500 and suspended from association with any FINRA member in all capacities for 12 months for participating in private securities transactions without disclosure or approval, engaging in undisclosed outside business activity, and making false statements on compliance questionnaires.
LeBoeuf used his personal email to solicit his firm client, who was also a family member, to invest in a pooled real estate investment fund. He also solicited multiple investors, including firm clients, to invest in convertible promissory notes issued by a software company. He sent emails introducing the investment and recommending specific investment amounts to his investors.
LeBoeuf formed a limited liability company to facilitate investments in the software company and ensured investors' funds were wired to the company. Firm clients invested a total of $750,000 in the software company's convertible promissory notes based on LeBoeuf's solicitations and facilitation.
None of these activities were disclosed to or approved by his firms. LeBoeuf conducted these private securities transactions completely outside his firms' supervision and knowledge, depriving the firms of the opportunity to conduct due diligence on the investments and assess their suitability for customers.
LeBoeuf also engaged in an undisclosed outside business activity without providing prior written notice to or obtaining approval from his firm. While associated with his firm, he filed articles of incorporation for an LLC with the Ohio Secretary of State. He was the authorized signor for the company's bank account and was identified in the company's operating agreement as the member, sole manager, and partnership representative for tax purposes. This business activity should have been disclosed to his firm.
Adding to the violations, LeBoeuf falsely attested on annual compliance questionnaires that he had not used a personal device to communicate with clients using software not available from the firm, when in fact he had used personal email to solicit investments in the real estate fund and software company.
In the course of soliciting potential investors in the software company, LeBoeuf emailed a company presentation to investors that violated FINRA's communications standards. The presentation did not provide potential investors with an adequate basis to evaluate all relevant facts about the investment. It failed to adequately address the illiquidity of the proposed investment or the possibility of investment loss. It also failed to identify assumptions, limitations, impediments, and restrictions that could inhibit achievement of a yearly revenue forecast.
The 12-month suspension reflects the multiple serious violations including substantial selling away ($750,000 in software company investments), undisclosed outside business activity, false attestations on compliance questionnaires, and misleading communications with investors. LeBoeuf stated he did not receive selling compensation, which may have been a mitigating factor preventing an even longer suspension or bar.
