Goldman Sachs placed financial adviser Luke Thornburn on administrative leave for his "Make Christianity Great Again" hat business, which the firm says Thornburn did not seek approval for and, thus, classifies as an unapproved outside business activity.
According to the New York Times, Thornburn, like many other financial industry employees, donated to a presidential candidate's campaign—the article noting that Thornburn was the only Goldman Sachs employee to choose Donald Trump—but unlike other employees, Thornburn trademarked the Trump-adjacent phrase "Make Christianity Great Again" and began selling red and blue hats emblazoned with the phrase via the Internet.
The article states that Thornburn did not seek approval from Goldman Sachs to pursue the outside business activity of selling hats and, in response, Goldman Sachs placed Thornburn on leave.
Though Thornburn's tale may appear fairly benign, it is symptomatic of a potentially greater problem of a broker or financial adviser engaging in an undisclosed and unapproved outside business activity, and then soliciting investments in this business away from the firm (and protections afforded by regulatory oversight) or in a pattern that is in the outside business activity's best interests at the expense of the client's.
Click here to read about several significant violations related to outside business activities.
FINRA rules state that no registered person may pursue an outside business activity without prior written notice and approval from their employing firm. The SEC enforces similar rules relative to outside businesses and conflicts of interest.
If you have invested with a broker or financial adviser whose participation in an unapproved and/or undisclosed outside business activity has created a conflict of interest situation proving harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News: Goldman Sachs Puts Worker Linked to Donald Trump on Leave (New York Times)