Former Registered Rep and Adviser Sanctioned For Statements Re Qualifications
Broker-dealers and investment advisers are subject to a number of restrictions regarding marketing and advertising their services. In contrast, those who are not registered but acting as, for example, an unregistered investment adviser, are not subject to the same restrictions. This does not mean, however, that an unregistered adviser has no constraints on advertising. A recent case filed by the Commission, illustrates the point. In the Matter of Collaborative Financial Consulting LLC, Adm. Proc. File No. 3-21782 (October 11, 2023).
Collaborative Financial is a limited liability company based in Beverly Hills, California. The firm is not registered with the Commission or any other agency. Jason Reynolds has been the sole member of Collaborative from January 7, 2016, to the present. Previously, he was a registered representative and investment adviser associated with a registered representative and investment advisers.
In June 2019 Respondent Reynolds resigned his positions as a registered representative and investment adviser. His registration was terminated. The next month Mr. Reynolds began using Collaborative to conduct business as an unregistered investment adviser and financial planner. He also provided other services such as tax preparation and health insurance.
For a fee, Mr. Reynolds and his firm met personally with clients. During the meetings advise was furnished on stocks traded on national exchanges. Typically, after the meeting the clients placed securities purchase or sell orders through a broker. In some instances, Mr. Reynolds used the clients’ information to place and execute the transactions. Over a two-year period, beginning in 2019, Respondents received fees of at least $150,000 from eleven clients in several states for providing investment advice.
During the period Mr. Reynolds provided clients a document titled Client Agreement. It described the services being rendered. It also stated that Mr. Reynolds holds Series 7, 66, and 65 licenses in several states. He knew at the time the agreements were provided to the clients that those licenses had been terminated. The Order alleges violations of Advisers Act Section 206(2).
To resolve the proceedings Respondents consented to the entry of cease-and-desist orders based on the Section cited in the Order. In addition, Mr. Reynolds is barred essentially from the securities business but may apply for reentry after three years. The firm is censured. Mr. Reynolds will also pay a penalty of $20,000. That penalty is deemed satisfied by the amount paid in a parallel California state proceeding brought against each Respondent.
Former Registered Rep and Adviser Sanctioned For Statements Re Qualifications
Broker-dealers and investment advisers are subject to a number of restrictions regarding marketing and advertising their services. In contrast, those who are not registered but acting as, for example, an unregistered investment adviser, are not subject to the same restrictions. This does not mean, however, that an unregistered adviser has no constraints on advertising. A recent case filed by the Commission, illustrates the point. In the Matter of Collaborative Financial Consulting LLC, Adm. Proc. File No. 3-21782 (October 11, 2023).
Collaborative Financial is a limited liability company based in Beverly Hills, California. The firm is not registered with the Commission or any other agency. Jason Reynolds has been the sole member of Collaborative from January 7, 2016, to the present. Previously, he was a registered representative and investment adviser associated with a registered representative and investment advisers.
In June 2019 Respondent Reynolds resigned his positions as a registered representative and investment adviser. His registration was terminated. The next month Mr. Reynolds began using Collaborative to conduct business as an unregistered investment adviser and financial planner. He also provided other services such as tax preparation and health insurance.
For a fee, Mr. Reynolds and his firm met personally with clients. During the meetings advise was furnished on stocks traded on national exchanges. Typically, after the meeting the clients placed securities purchase or sell orders through a broker. In some instances, Mr. Reynolds used the clients’ information to place and execute the transactions. Over a two-year period, beginning in 2019, Respondents received fees of at least $150,000 from eleven clients in several states for providing investment advice.
During the period Mr. Reynolds provided clients a document titled Client Agreement. It described the services being rendered. It also stated that Mr. Reynolds holds Series 7, 66, and 65 licenses in several states. He knew at the time the agreements were provided to the clients that those licenses had been terminated. The Order alleges violations of Advisers Act Section 206(2).
To resolve the proceedings Respondents consented to the entry of cease-and-desist orders based on the Section cited in the Order. In addition, Mr. Reynolds is barred essentially from the securities business but may apply for reentry after three years. The firm is censured. Mr. Reynolds will also pay a penalty of $20,000. That penalty is deemed satisfied by the amount paid in a parallel California state proceeding brought against each Respondent.