Finra Suspends Ex-Merrill Broker for Facilitating Outside Investments
A former Merrill Lynch broker in New York has agreed to a six-month suspension and $20,000 fine for allegedly helping three customers make outside investments without firm approval, according to a settlement issued by the Financial Industry Regulatory Authority.
“Although the companies are still operating, the three customers are unlikely to receive any return on these investments,” Finra said.
Finra’s acceptance, waiver and consent letter with LeBlanc said the sanctions were mitigated by the fact that the customers were experienced, high-net-worth investors who were represented by their own counsel in each of the transactions. It also noted that the investments were unsolicited and that LeBlanc did not receive compensation.
LeBlanc arranged and attended meetings between the companies and his customers, and shared legal documents using his Merrill email, according to the acceptance letter that he signed on October 20 without admitting or denying the findings.
Finra did not identify the customers, but the enforcement action appears to relate to Merrill’s $2.25 million settlement in July 2018 with hip hop producer Timothy Mosley, who performs as Timbaland. Finra said it began investigating LeBlanc after a June 2017 customer complaint, which parallels the failure-to-supervise complaint that Mosley filed against Merrill for $8 million.
Timbaland was a producer for the action film “Black Coal, Thin Ice,” which grossed $16.8 million, and also was an investor in underwear brand Frigo, according to published reports.
LeBlanc, who has been registered with New York-based family office Bruderman Brothers since Merrill allowed him to voluntarily resign in April 2017, could not immediately be reached for comment. Brian Neville, his lawyer at Lax & Neville in New York declined to comment.
LeBlanc commented to regulators that he did not contribute to Merrill’s Timbaland settlement and disagreed with the firm’s decision to settle, according to his BrokerCheck report.
Finra charged him with violating NASD Rule 3040 prohibiting private securities transactions without written permission from member firms, a trespass triggering automatic violation of Finra Rule 2010 requiring reps and firms to abide by high standards of commercial honor and just and equitable principles of trade.
Sources familiar with LeBlanc’s practice have said that his clients included 50 Cent and Eminem, among other celebrities.