← Broker database 2023-09-19
Leslie Jackson Barred for Selling Away and False Compliance Responses
According to FINRA, Leslie Don Jackson was barred from association with any FINRA member in all capacities for participating in private securities transactions totaling $1,975,000 without providing notice to his firm and for providing false responses on compliance questionnaires.
Jackson participated in the sale of promissory notes issued by entities purportedly engaged in a business that provided financing to construction companies. Jackson recommended the investments to five investors, including one family member and three firm customers, who ultimately purchased an aggregate $1,475,000 of the issuers' promissory notes. Jackson also personally purchased notes totaling $500,000. Jackson participated in these investments by telling the investors about the notes, answering questions about the investments, helping the investors complete the subscription documents, and collecting the payments for the investments to provide to the issuers.
Jackson received periodic payments from the issuers in amounts equal to 3% of each investment per year during their respective terms, paid monthly. Despite his active involvement and compensation, Jackson never provided advance written notice to his member firm prior to engaging in these transactions.
This type of violation is commonly referred to as "selling away" in the securities industry. FINRA rules require registered representatives to provide written notice to their firms before participating in private securities transactions so that firms can evaluate the investments and provide appropriate supervision. This protects both investors and the firm from unsuitable or fraudulent investments.
Making matters worse, Jackson falsely responded to questions about whether he had participated in private securities transactions on compliance questionnaires, demonstrating a conscious effort to conceal his misconduct.
Investors should be cautious when brokers recommend investments outside their firm, particularly promissory notes and other private placements. These investments often lack the regulatory protections of traditional securities and may be unsuitable or even fraudulent. Always verify whether an investment is offered through your broker's firm.