FINRA

SCOTT WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HE AIDED AND ABETTED AN INDIVIDUAL'S PRIMARY VIOLATION OF THE REGISTRATION REQUIREMENTS OF SECTION 15(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPLAINT ALLEGES THAT SCOTT, THROUGH HIS MEMBER FIRM, KNOWINGLY AND SUBSTANTIALLY ASSISTED THE INDIVIDUAL IN HIS VIOLATION OF THE FEDERAL SECURITIES LAWS. THE INDIVIDUAL ENGAGED IN THE RECOMMENDATION AND SALE OF SECURITIES TRANSACTIONS IN TEXAS WHEN THIS INDIVIDUAL WAS NOT REGISTERED WITH THE STATE OF TEXAS OR, WITH FINRA. THE COMPLAINT ALSO ALLEGES THAT SCOTT SHARED AT LEAST $45,700 OF HIS TRANSACTION-BASED COMMISSION INCOME WITH THE INDIVIDUAL WHILE THE INDIVIDUAL WAS UNREGISTERED WITH THE STATE OF TEXAS OR WITH FINRA. SCOTT RECEIVED $117,369.78 IN TRANSACTION-BASED COMMISSIONS RELATED TO THE SALE OF SECURITIES TO CUSTOMERS. NEITHER SCOTT NOR THE INDIVIDUAL DISCLOSED THEIR COMMISSION-SHARING PAYMENT ARRANGEMENT TO ANYONE AT THE FIRM. THE COMPLAINT FURTHER ALLEGES THAT DURING SCOTT'S ON-THE-RECORD TESTIMONY (OTR), HE KNOWINGLY PROVIDED FALSE INFORMATION TO FINRA REGARDING THE NATURE OF HIS RELATIONSHIP WITH THE INDIVIDUAL AND THE CONDUCT OF SCOTT AND THIS INDIVIDUAL REGARDING THE EXECUTION OF SECURITIES TRANSACTIONS. SCOTT'S SWORN TESTIMONY ON THESE TOPICS WAS MATERIAL TO FINRA'S INVESTIGATION, AND HIS FALSE ANSWERS IMPEDED THAT INVESTIGATION. IN ADDITION, SCOTT'S FALSE TESTIMONY CONSTITUTED A CLEAR ATTEMPT TO CONCEAL HIS AND THE INDIVIDUAL'S MISCONDUCT, AND THEREBY IMPEDED FINRA'S INVESTIGATION.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

4/10/2015

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, SCOTT CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT WHILE ASSOCIATED WITH HIS MEMBER FIRM, HE KNOWINGLY AND SUBSTANTIALLY AIDED AND ABETTED AN INDIVIDUAL IN ENGAGING IN THE RECOMMENDATION AND SALE OF SECURITIES TRANSACTIONS IN TEXAS WHEN THE INDIVIDUAL WAS NOT REGISTERED WITH THE STATE OF TEXAS OR WITH FINRA AND WHILE THE INDIVIDUAL'S ASSOCIATION WITH THE FIRM WAS PENDING. THE FINDINGS STATED THAT SCOTT REPEATEDLY FACILITATED THE INDIVIDUAL'S EFFORTS TO CONTINUE ACTING AS A SECURITIES BROKER DESPITE HIS UNREGISTERED STATUS BY FACILITATING INVESTMENT SEMINARS FOR THE INDIVIDUAL TO SOLICIT INVESTMENT BUSINESS FROM CURRENT AND POTENTIAL CLIENTS, MAKING ARRANGEMENTS TO ALLOW THE INDIVIDUAL TO MEET WITH CURRENT AND POTENTIAL CLIENTS TO SOLICIT INVESTMENT BUSINESS, AND EXECUTING TRADES BROKERED BY THE INDIVIDUAL FOR CLIENTS. BY ENGAGING IN THIS CONDUCT, SCOTT AIDED AND ABETTED THE INDIVIDUAL'S VIOLATIONS OF SECTION 15(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934. THE FINDINGS ALSO STATED THAT SCOTT SHARED AT LEAST $45,700 OF HIS TRANSACTION-BASED COMMISSION INCOME WITH THE INDIVIDUAL WHILE THE INDIVIDUAL WAS UNREGISTERED WITH THE STATE OF TEXAS OR WITH FINRA. THE FINDINGS ALSO INCLUDED THAT DURING ON-THE-RECORD TESTIMONY (OTR), SCOTT KNOWINGLY PROVIDED FALSE INFORMATION TO FINRA STAFF REGARDING THE NATURE OF HIS RELATIONSHIP WITH THE INDIVIDUAL AND THEIR CONDUCT. SPECIFICALLY, SCOTT FALSELY TESTIFIED THAT THE INDIVIDUAL PLAYED NO MATERIAL ROLE IN SEMINAR PRESENTATIONS TO CUSTOMERS AND POTENTIAL CLIENTS. SCOTT ALSO PROVIDED FALSE TESTIMONY IN HIS OTR ABOUT THE INDIVIDUAL'S EXTENSIVE INVOLVEMENT IN PROVIDING SECURITIES ADVICE AND MAKING INVESTMENT RECOMMENDATIONS TO VARIOUS CUSTOMERS, AND SCOTT'S EXECUTION OF TRANSACTIONS THAT HAD BEEN RECOMMENDED, BROKERED AND/OR ARRANGED BY THE INDIVIDUAL. SCOTT'S SWORN TESTIMONY ON THESE TOPICS WAS MATERIAL TO FINRA'S INVESTIGATION, AND HIS FALSE ANSWERS IMPEDED THAT INVESTIGATION.