Outside business activities (“OBA”) are no joke when it comes to your employment with a broker-dealer.
Earlier this month, Merrill Lynch fired a broker in Miami who had been with the firm for 26 years, because he “participated in a financial arrangement with a client and failed to disclose outside business activity,” according to the entry the firm placed on his U5.
The broker, Jorge A. Sonville, was mentioned but not named as a party by former clients suing Merrill. The clients, over 80 years of age, alleged that the firm failed to supervise Sonville, who beginning in 2015, got them to put nearly $5 million into a Key Biscayne liquor store that was later sold for under $600k. The former clients also alleged that Sonville and his wife held an “undisclosed interest” in the liquor store, and received payments of about $70,000 in connection with it.
Sonville, who began at Merrill in 1995, is no longer registered to represent a broker-dealer, according to his FINRA BrokerCheck record.
Even careless mistakes in reporting outside business activities of the most trivial nature can lose you your job with a broker-dealer, or worse. You can also ultimately lose your licenses. You must timely report such activities before engaging in them and get approval from your firm ahead of time.
Contact the Law Offices of Christopher H. Tovar, PLLC if you are considering an outside business activity, or you have an inquiry from your broker-dealer or FINRA about one that already exists.
