FINRA fined and suspended former LPL Financial (Scottsdale, AZ) broker James Michael Rapisarda for participating in a private securities transaction without prior written notice to LPL. The transaction purportedly involved a company in which Rapisarda was a shareholder.
According to AWC #2019061034501, James Rapisarda (CRD #1851883) recommended that several individuals, including an LPL customer, invest in an unidentified company, resulting in a series of investments.
Further investigation revealed that Rapisarda was a minority shareholder in this company and that Rapisarda failed to provide prior written notice to LPL of the transactions or his role in them.
Rapisarda's BrokerCheck file indicates business interests in Soundview Capital Management (Phoenix, AZ), which was also his DBA for LPL business, and an investment in a Soundview fixed annuity product.
Prior to his 2017-18 association with LPL Financial, Rapisarda registered as a broker with National Planning Corporation (NPC), also of Scottsdale, Arizona. LPL discharged Rapisarda after an internal investigation revealed he violated the firm's private securities transaction policy for disclosure of capital-raising efforts.
When a broker or financial adviser fails to disclose a private securities transaction or fails to seek approval from their employing firm before engaging in such solicitations or similar business activities, the omission weakens both the firm's ability to supervise its broker and customer accounts for potential red flags related to the transaction, such as an undisclosed conflict of interest that could arise by the broker owning a portion of the company or fund that is the target of investment.
Brokerage firms chafe against the supervisory obligation claiming they can not supervise what is not disclosed by a broker. However, FINRA and the SEC not only expect aggressive supervision, but also discipline firms for failing to engage in supervisory practices and procedures which would reasonably reveal private securities transactions and outside business activities.
If you have invested with former LPL Financial broker James Rapisarda or with any broker or financial adviser who failed to provide prior written notice to or seek permission from their firm to sell a securities product which in turn has proven harmful to your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.