Initiated By
FINRA
Allegations
Without admitting or denying the findings, Visher consented to the sanctions and to the entry of findings that he made negligent misrepresentations of material facts and omitted material information about private placement offerings involving two proposed broker-dealer firms to a prospective purchaser. The findings stated that Visher, the Chief Compliance Officer, Chief Financial Officer, and Managing Director of both entities, prepared and distributed all written materials related to the offerings and sent emails to the prospective purchaser in which he provided additional information about the offerings and answered the prospective purchaser's questions. In the written materials and emails, Visher negligently misrepresented that the entities were approved FINRA members and broker-dealers. Visher incorrectly believed that the inaccurate representations in the written documents were boilerplate and would not cause confusion. However, these misrepresentations and omissions were material and misleading because they gave the prospective purchaser inaccurate information about the entities' regulatory approval to operate core business lines. In addition, after FINRA denied a new membership application (NMA) for one of the entities, Visher sent the prospective purchaser an email and attachments that continued to refer to that entity as a "broker-dealer" and outlined "first year projections" for the entity's income and expenses, including projected income from broker-dealer revenue streams that required FINRA membership and approval. After filing an NMA for the other entity, which was largely identical to the NMA FINRA had already denied the prior month, Visher sent an email to the prospective purchaser stating that the company name was amended, without disclosing that the other entity was a separate legal entity, formed after FINRA had denied the initial NMA. Visher believed that the prospective investor understood the legal status of each entity. However, these misrepresentations and omissions were material and misleading because they gave an incorrect impression of the likelihood that the other entity would receive approval to operate as a U.S. broker-dealer and earn revenue. Further, Visher sent another email to the prospective purchaser in which he negligently misrepresented that he was registered with FINRA in multiple capacities, including as a General Securities Principal, Registered Options Principal, and Financial and Operations Principal, when those registrations had expired. Although Visher was in the process of seeking an administrative waiver from FINRA to avoid the need to retest for each expired registration, FINRA had not approved Visher's request. Visher believed that FINRA would ultimately approve the request. However, Visher's misstatements and omissions were material because they provided the prospective purchaser with inaccurate information about Visher's qualifications. Later, the prospective purchaser signed the other entity's private placement memorandum and subscription agreement and invested $25,000 in exchange for a 10 percent ownership interest in that entity. Visher returned these funds to the purchaser and also paid the purchaser a 30 percent premium.
Resolution
Acceptance, Waiver & Consent(AWC)
Sanctions
Civil and Administrative Penalty(ies)/Fine(s)
Amount
$5,000.00
Sanctions
Suspension
Registration Capacities Affected
All Capacities
Duration
four months
Start Date
3/4/2024
End Date
7/3/2024
Broker Comment
WITHOUT ADMITTING OR DENYING THE FINDINGS, I HAD DEFINITE KNOWLEDGE THAT THE INVESTOR WAS A RETIRED CFO/FINANCE EXECUTIVE, HAVING SHOWN THE OFFERING AND DISCUSSING ALL ASSOCIATED RISKS WITH THEIR FINANCIAL ADVISOR AT JPMORGAN, THE INVESTOR ALSO SHARED THE INVESTMENT OPPORTUNITY WITH THEIR SIGNIFICANT OTHER BEFORE INVESTING INTO THE COMPANY. I DIDN'T ACT AS THE INVESTOR'S BROKER OR ADVISOR IN THE TRANSACTION, NOR DID I COLLECT ANY COMMISSIONS OR FEES FROM THE INVESTOR. ALL INVESTOR MONIES WERE HELD IN T-BILLS, AS PRESCRIBED IN THE SUBSCRIPTION AGREEMENT. ON DECEMBER 9, 2022, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA) ISSUED ME A SERIES 79TO - INVESTMENT BANKING REGISTERED REPRESENTATIVE EXAM WAIVER. ON JANUARY 30, 2023, THE FINRA SENIOR EXAMINER STATED THAT THE BROAD BEACH NMA WAS "DEEMED TO HAVE NEVER BEEN FILED", AND TO SUBMIT ANOTHER NMA "UNDER A NEWLY ESTABLISHED CRD NUMBER" IF I WISHED TO FILE ANOTHER NMA, INVITING ME TO FREELY FILE ANOTHER NMA AT WILL, WITHOUT ANY RESTRICTIONS. THIS CAUSED CERTAIN PRINCIPAL/FINRA LICENSES OF MINE TO LAPSE AFTER THE BROAD BEACH NMA WAS "DEEMED TO HAVE NEVER BEEN FILED". FROM FEBRUARY 8TH, 2023, TO MAY 11, 2023, I RE-PASSED SIX REGULATORY EXAMS AND PASSED TWO ADDITIONAL REGULATORY EXAMS. I RE-OBTAINED ALL MY PREVIOUS PRINCIPAL LICENSES THROUGH FINRA EXAMINATIONS, INCLUDING MY FINRA SERIES 4 - REGISTERED OPTIONS PRINCIPAL EXAMINATION, SERIES 24 - GENERAL SECURITIES PRINCIPAL EXAMINATION AND SERIES 27 - FINANCIAL OPERATIONS PRINCIPAL EXAMINATION, IN ADDITION TO MY NFA SERIES 3 - NATIONAL COMMODITY FUTURES EXAMINATION, SERIES 16 - NYSE SUPERVISORY ANALYST EXAMINATION AND SERIES 57TO - SECURITIES TRADER EXAMINATION. THE NEW FIRM'S APPLICATION WAS DEEMED SUBSTANTIALLY COMPLETE BY FINRA STAFF ON MARCH 20, 2023, WITH NO MENTION OF ANY PREVIOUS FILING PROBLEMS NOR ANY MENTION OF THE BROAD BEACH NMA. ON AUGUST 22, 2023, THE INVESTOR AND I EXECUTED THE FIRM'S BUYOUT AGREEMENT. AS OF APRIL 10TH, 2024, THE INVESTOR REFUSED THE 30% BUYOUT PREMIUM AGREED TO IN THE INVESTOR-COMPANY EXECUTED SUBSCRIPTION AGREEMENT AND VOLUNTARILY ACCEPTED $642.36 AS FULL AND FINAL INTEREST FOR THE INVESTMENT IN THE COMPANY FROM MARCH 10, 2023, TO SEPTEMBER 11, 2023, OR 185 DAYS OUT OF 360-DAY YEAR AT 5.00% INTEREST PER ANNUM AND AGREED TO HAVE RECEIVED AND TO REPAY AN OVERPAYMENT OF $6,857.64 IN INTEREST. THIS REPRESENTS A TOTAL RETURN OF INTEREST OF 2.569% ON INVESTOR PRINCIPAL (FULLY RETURNED IN 2023). THE INVESTOR WAS UNHARMED, DID NOT COMPLAIN TO FINRA ABOUT ME AND SUFFERED NO FINANCIAL OR EMOTIONAL LOSSES THROUGHOUT THE TRANSACTION AND WAS FULLY COGNIZANT OF ALL ASSOCIATED POTENTIAL RISKS AND UPSIDE OF THE INVESTMENT OFFERING AFTER THE INVESTOR LEARNED ABOUT THE INVESTMENT THROUGH THOROUGH EMAIL AND PHONE CONVERSATIONS WITH ME, AND AFTER DISCUSSING THE INVESTMENT AND RISKS FULLY WITH THEIR REGISTERED FINANCIAL ADVISOR.