Former Cambridge Investment Research, Inc. broker Sheldon J. Harber (CRD# 867340) has submitted a Letter of Acceptance, Waiver and Consent to allegations against him for improperly engaging in private securities transactions (also known as “selling away.”)
According to the AWC, Harber is accused of facilitated investments for six investors in a private company called Aisle411 Inc. FINRA alleged that Harber set up and participated in investment meetings, advised clients on how much to invest in Aisle411, and endorsed Aisle411 in personal and public communications. FINRA also alleged that, in violation of industry rules, Harber did not provide Cambridge with written notice prior to making these recommendations, some of whom were his customers at Cambridge.
“Selling away” means that a broker is selling or offering securities that are not offered or approved by the brokerage firm he or she is affiliated with. Brokerage firms put a lot of effort into carefully researching and approving the investment products they allow their brokers to offer to their clients, and a broker who engages in “selling away” is acting inappropriately. Brokers or financial advisers who engage in this kind of behavior are abusing their position of trust with their clients, and their brokerage firms often have no idea that the unapproved investment products are being offered.
Although the firm may be unaware that one of its brokers is offering these outside investments, brokerage firms do have a basic duty to supervise the actions of their employees. In a case of “selling away,” it may be possible to also hold the brokerage firm responsible for the losses sustained by victims of stockbroker misconduct or fraud because of a failure to supervise.
By accepting the AWC, Harber is suspended from association with any FINRA member in any capacity for four months and must pay a $10,000 fine.
If you were working with broker Sheldon J. Harber and invested in Aisle411 Inc., call our securities fraud lawyers for a free case evaluation to learn about your options.