The Financial Industry Regulatory Authority (FINRA) has fined and suspended registered representative Yong "Michael" Chen of Sunnyvale, California, for failure to disclose to his employer of outside business activities.
While associated with firm Foresters Equity Services, Inc., Chen operated a business venture on the side called Mastermind College Funding Group, a corporation engaged in financial aid planning, application services and tax, career and college admission planing services. Chen was found to have received $44,000 in compensation from Mastermind, but had failed to notify Foresters of his involvement in the corporation.
Chen also was found to have sold a fixed indexed annuity through an insurance company to a non-Foresters customer without notifying Foresters of the sale. Chen received $2,322 in commission for the transaction.
Not only did Foresters have a policy prohibiting outside business activity without first notifying the firm, FINRA rules require such disclosures. Without full disclosure of outside activities, representatives and brokers can easily put themselves in positions where clear conflicts of interest or involvement in unregulated and potentially fraudulent schemes arise, possibly putting investors at severe financial risk.
If you suspect a broker has engaged in misconduct outside of a FINRA member firm's supervision which resulted in losses to you, please call The Law Offices of Jonathan W. Evans & Associates at 818-760-9880.