Written by The White Law Group• November 6, 2023• 7:00 pm• Broker Investigations

Jason Jodway Sanctioned for Selling Away Allegations

Michigan Sanctions Advisor Jason Jodway for Selling Away

The state of Michigan reportedly sanctioned financial advisor Jason Jodway (CRD#: 2998141) in May 2020 with a $10,000 civil and administrative penalty related to “acting as an unregistered agent in the sale of securities to Michigan investors; by acting as an unregistered investment adviser and investment adviser representative; and by omitting material information necessary to make other statements made not misleading in connection with the offer and sale of securities.”

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According to a his FINRA BrokerCheck report, in July 2022, Michigan brought a motion for default judgement after Jason Jodway was provided an opportunity but failed to respond, “Defendant is Permanently enjoined, whether acting directly or through any person, entity, or other device, from engaging in conduct in violation of the Michigan Uniform Securities Act, MCL 451.2101 et seq.”

Selling Away

“Selling away” refers to the practice in which a broker encourages a client to purchase securities that are not part of the offerings provided by their brokerage firm. Typically, brokerage firms maintain lists of approved products that their brokers can recommend to clients. These approved products undergo thorough due diligence screenings and are deemed solid by the firm’s screening personnel.

When a broker sells securities that are not on the approved list, they are taking the risk of offering products for which due diligence has not been conducted. In most cases, such actions violate securities regulations.

FINRA Rule 3280 expressly prohibits a registered representative or associated person from selling any security “away” from their member firm unless the firm has granted specific authorization for the sale. Rule 3280 mandates that registered individuals must formally notify their firm in writing about the proposed transaction before making the sale.

Selling away is widely regarded as a breach of both internal company policies and broader securities regulations. Although it may lead to increased commissions for the broker, it also involves a heightened level of risk since these products have not been vetted or approved for sale by the broker’s employer.

FINRA BrokerCheck – Jason Jodway

Jason Jodway was previously registered both as a broker and as an investment adviser. He has two pending customer complaints on his broker record. One complaint was filed in February 2022 for allegations of “Failure to perform due diligence, breach of fiduciary duty, and otherwise negligent in recommending an investment in an oil and gas private placement: the Explore America Income fund.”

The other complaint, from February 2021 alleges “…fraudulent debentures sold to investors. Jodway was licensed through FINRA, but the commission was not paid to his broker-dealer. It was never disclosed to the broker-dealer that Jodway was involved in selling away…” The broker denies the allegations, according to his broker report.

According to this FINRA BrokerCheck report, Jason Jodway was affiliated with the following firms during his career, among others:

11/08/2019 – 12/13/2019, ALLSTATE FINANCIAL SERVICES, LLC (CRD#:18272), WATERFORD, MI,
B, 09/14/2016 – 12/01/2017, SECURIAN FINANCIAL SERVICES, INC. (CRD#:15296), Southfield, MI
B, 07/31/2003 – 09/08/2016, VALIC FINANCIAL ADVISORS, INC. (CRD#:42803), AUBURN HILLS, MI

The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.

FINRA BrokerCheck provides investors with detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.

Filing a Complaint against your Brokerage Firm

When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.