Claimants allege misrepresentation and unsuitable recommendations based on false information with regard to the purchase of a variable annuity and REIT.

$250,000.00

FINRA

Bays was named a respondent in a FINRA complaint alleging that Bays electronically signed the name of customers on account applications and an account transfer form without the customers' knowledge or permission. The complaint alleges that Bays provided false, incomplete, and misleading responses to FINRA requests for information and documents and during on-the-record testimony in connection with its investigation into allegations in Bays' initial Form U5 and customer complaints reported in an amended Form U5. The Form U5 stated that Bays' employment was terminated after he provided misrepresentations to his member firm in response to inquiries surrounding his submission of key person life insurance applications for non-licensed assistants. The customer complaints reported in the amended Form U5 alleged that Bays forged the customers' signatures on account applications. Bays responded to a request in writing stating that he was not aware of life insurance policies being sold to two associated persons and that he was not aware of any commissions being earned. Bays' response was false and misleading. At the time of Bays' response, he had earned over $720 in commissions from a still active life insurance policy for one associated person issued by an insurance company, and over $561 in commissions from a still active insurance policy for the other associated person issued by another insurance company. The complaint also alleges Bays gave false and misleading statements to insurance companies, FINRA, and his firm. Bays provided false and misleading information on insurance applications, in a Professional Profile form, in an email, in response to a FINRA request, including requests that do not specifically cite FINRA Rule 8210, and falsely stated that one of the associated persons did not have accounts under Bays' management at the firm. The complaint further alleges that Bays caused his firm to make and preserve inaccurate books and records by forging the customers signatures and by overstating customers annual income and net worth on new account applications.

Decision

Bar (Permanent)

All capacities

Indefinite

4/29/2024

Default decision rendered March 28, 2024. The sanction was based on findings that Bays forged his customers' signatures by electronically signing their names on six account applications and one account transfer form without the customers' permission and misstated the income and net worth of three of the customers on account documents. The findings stated that the forgeries and false statements about income and net worth harmed the customers because they did not know that Bays was transferring their accounts and misstating their financial condition on brokerage documents. As a result of this conduct, Bays caused his member firm to make and preserve inaccurate books. The findings also stated that during FINRA's investigation into Bays' alleged misconduct, he submitted written responses to FINRA's requests for documents and information that contained false and misleading statements and provided false and misleading investigative testimony during an on-the-record (OTR) interview. The findings also included that Bays provided false and misleading information to insurance companies on insurance applications and in an email communication. The decision became final April 29, 2024.

Texas

Mr. Bays made material misrepresentations to the Commissioner or the Board in connection with information considered necessary by the Commissioner or the Board to determine his business repute or qualifications. Tex. Gov't Code §§4001.058(a)(1), 4007.105(a)(9)(A)(ii). The Commissioner should deny Mr. Bays's application. Tex. Gov't Code § 4007.105(a)(9)(A)(ii). It is therefore ordered that the agent and investment adviser representative registration of Believeau Bays is hereby denied.

Order

Denial

Customer alleges that the representative affixed her signature to an account application.

Customer alleges that the representative affixed her signature to an account application.

LPL Financial LLC

Discharged

Provided misrepresentations to Firm in response to inquiries surrounding Representative's submission of key person life insurance applications for non-licensed assistants.

CUSTOMER ALLEGES THAT NONTRADED REAL ESTATE INVESTMENT PURCHASED IN 2017 WAS MISREPRESENTED AND UNSUITABLE.

$5,000.00

CUSTOMER ALLEGES THAT NONTRADED REAL ESTATE INVESTMENT TRUST PURCHASED IN 2017 WAS MISREPRESENTED AND UNSUITABLE.

$5,000.00

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Discharged

Conduct including exercising discretion in a nondiscretionary client account, and discussing an annuity purchase with unauthorized family members.

MERRILL LYNCH'S ALLEGATIONS HAVE BEEN PROVEN WRONG THROUGH DETAILED INVESTIGATIONS, TESTIMONY UNDER PENALTY OF PERJURY FROM THE CLIENT AND MERRILL LYNCH'S OWN ADMITTANCE DURING THE INVESTIGATIONS. THE CLIENT VOLUNTARILY PROVIDED A SWORN AFFIDAVIT STATING THAT MERRILL LYNCH'S CLAIMS WERE WITHOUT MERIT ALONG WITH IMMENSE SUPPORT FOR THE ADVISOR. AT NO POINT DID THE CLIENT HAVE ANY COMPLAINTS ABOUT THE ADVISOR. THE CLIENT WAS NEVER AT RISK OF POTENTIAL FINANCIAL HARM. PER THE CLIENT'S REQUEST THEY REMAINED A CLIENT OF THE ADVISOR AND INSISTED TO HAVE THE ADVISOR CONTINUE TO WORK WITH THEIR FAMILY.