The following story appeared in InvestmentNews on October 13, 2014:
Former LPL Financial star branch manager James “Jeb” Bashaw was terminated last month for several allegations, including participating in private securities transactions without providing written disclosure to and obtaining written approval from LPL, according to his report on CRD — or central registration depository, the central licensing and registration system for the U.S. securities industry and its regulators.
Engaging in securities transactions without broker-dealer approval is commonly known as “selling away” in the securities industry, one of the most common allegations of breaking industry rules made against registered reps.
Mr. Bashaw allegedly also borrowed from a client and engaged in a business transaction that created a potential conflict of interest without providing written disclosure to and obtaining written approval from the firm, according to the CRD report.
Mr. Bashaw’s profile on BrokerCheck, the industry database maintained by the Financial Industry Regulatory Authority Inc., states that LPL terminated Mr. Bashaw for allegedly “failing to follow firm policies and industry regulations.” It makes no mention of his allegedly borrowing from a client or “selling away.”
Mr. Bashaw did not return a call on Monday to comment. On his BrokerCheck report, Mr. Bashaw responded to the allegations with the statement: “I am home office supervised and have had 13 perfect audits. I am still unclear as to specifics.”
His BrokerCheck report also states that Mr. Bashaw is registered with Wunderlich Securities. Kathy Ridley, a spokeswoman for Wunderlich, said that the firm was waiting for regulators to approve the transfer of Mr. Bashaw’s license. A handful of his employees from his branch in Houston have joined Wunderlich, she said.
Mr. Bashaw is a star broker in Houston; in 2011, Barron’s magazine ranked him the top ranked him the top financial adviser in Texas, with total assets of $3.8 billion. It’s not clear how much of that client money Mr. Bashaw controlled directly. Industry sources said he had total of about two dozen advisers working under him in various offices.
LPL was tight-lipped about elaborating on the reasons for Mr. Bashaw’s termination.
“Effective Sept. 24, 2014, James Bashaw is no longer registered with LPL,” said LPL spokeswoman Amanda Keating. “The reasons for the termination of his registration are set forth in the U5 filed by the firm.”
Mr. Bashaw had two prior customer disputes, both settled on his BrokerCheck profile, one for $10,000 in 2012 and the other for $200,000 in 1990.