Our law firm is investigating LPL Financial (“LPL”) in connection with the supervision of Marc Halan Baldinger (“Baldinger”), CRD No. 1942349. Baldinger was based out of Stuart, Florida with LPL from September 2001 to December 2012. On November 14, 2014, Baldinger entered into a Letter of Acceptance, Waiver and Consent (“AWC”) with the Financial Industry Regulatory Authority (“FINRA”) in connection with allegations of “selling away.” Selling away occurs when a broker participates in a private securities transaction for selling compensation without prior approval of his employer member firm. In the AWC, Baldinger consented to a suspension in all capacities for a period of 18 months, payment of a fine in the amount of $10,000, and payment of $233,000 in disgorgement of selling compensation, plus interest.
According to the AWC, “NASD Conduct Rule 3040 prohibits persons associated with a FINRA member from engaging in any manner in a private securities transaction without providing written notice to the FINRA member prior to that participation. Rule 3040 defines “private securities transaction” as, “any securities transaction outside the regular course or scope of the associated person’s employment with the member.” In the case of a transaction in which the associated person has received or may receive selling compensation, the associated person may not participate in the transactions unless and until the member approves in writing the associated person’s participation in the transaction.”
The AWC adds, “between August 19, 2010 and November 24, 2012, Baldinger introduced 20 individuals and entities to brokerage firms RS and AFS, and assisted the customers in establishing accounts and purchasing inverse strips of Government National Mortgage Association Interest Only bonds (“GNMA I/Os”). The 20 clients, all high net worth individuals and entities, ultimately invested a combined total of at least $12 million in GNMA I/Os. Baldinger received compensation in connection with the investments totaling approximately $233,427. The above-described securities transactions were outside the course and scope of Baldinger’s employment with his member firm, and Baldinger did not seek or obtain written approval from his member firm 10 participate in the transactions. As a result of the foregoing conduct, Baldinger violated NASD Conduct Rule 3040 and FINRA Rule 2010.”
The AWC further states, “On December 10, 2004, Baldinger established Eventus, Ltd. with himself as the limited partner. Although Baldinger did disclose the existence of Eventus to his member firm, he did not disclose the other businesses engaged in by Eventus or his role in those businesses. Baldinger and his wife owned 100% of Eventus. On June 17, 2010, Baldinger established Ignorus, LLC, naming Eventus, LLC as the managing member and manager. On June 30,2010, Baldinger established Aegis Holdings, LLC (“Aegis”) with Ignorus as the managing member and manager. Aegis was established for the purpose of investing the funds of the 20 individuals and entities described above in the GNMA I/Os. Baldinger was the individual behind the entities who managed the business of Aegis and received compensation as the manager. At all times relevant herein, Baldinger’s member firm required that associated persons report outside business activities to the Firm by completing an Outside Business Activity Disclosure Form and submitting it to the Firm’s compliance department. Baldinger never disclosed to his member firm his management positions with Ignorus and with Aegis.
Finally, the AWC states, “in addition, Baldinger was required by his member firm to annually complete a compliance questionnaire, which, among other things, inquired if the respondent had participated in any outside business activities over the past year, In response to the questions, Baldinger failed to disclose his position as managing member of Aegis and Ignorus in the questionnaire he completed on July 7, 2010 or the questionnaire he completed on November 28,2011. As a result of the foregoing conduct, Baldinger violated NASD Conduct Rule 3030 (for the time period from June 30, 2010 through December 14, 2010); FINRA Rule 3270 (for the time period, from December 15, 2010, through in or about November 2012); and FINRA Rule 2010.”
If you invested with Marc Halan Baldinger, formerly of LPL Financial in Stuart, Florida, please contact our law firm, toll free, at 888-997-9956.