FINRA Investigates Keith Baron, Equity Services Advisor for Broker Misconduct
According to public records on December 14, 2023, the Financial Industry Regulatory Authority (FINRA) recommended that disciplinary action be brought against financial advisor Keith Baron (CRD#: 3231494) alleging the following rules violations:
- FINRA Rule 2010 by making material misrepresentations and omissions to investors;
- FINRA Rules 3270 and 2010 by failing provide notice of his outside business activity to his FINRA member firm;
- FINRA Rules 3280 and 2010 by failing to provide his firm notice of his participation in private securities transactions away from the firm;
- FINRA Rule 2010 by providing false information to his firm; and
- FINRA Rules 2010 and 8210 by providing false information to FINRA.
According to FINRA, Keith Baron reportedly faces multiple charges related to misleading and deceptive practices regarding a company he was allegedly consulting with “Company A.”
In 2016, Baron allegedly recommended Company A, a financially troubled entity, to two investors without disclosing his vested interest via a consulting agreement, which entitled him to payments post-Company A’s funding. This reportedly led the two individuals to invest over $350,000 based on misrepresented prospects. Furthermore, in 2018 and early 2019, Baron allegedly falsely told the two investors that Company A planned to repurchase their shares, adding to the misrepresentation.
Baron also purportedly breached FINRA rules by failing to disclose his consulting role and compensation from Company A to his member firm, Equity Services Inc., from 2015 to 2017. Additionally, he allegedly failed to inform Equity about his involvement with Company A stock in 2016, violating further FINRA regulations.
Later, when confronted by FINRA about these actions, Baron allegedly provided false information regarding his involvement with the two individuals’ investment in Company A, compounding his alleged infractions under FINRA Rule 2010.
Outside Business Activities
FINRA Rule 3270 requires registered representatives to provide prompt written notice to their member firm before engaging in any outside business activity.
Why does it matter if your broker is involved in outside business activities, you might say. But this rule is designed to protect investors by ensuring that registered individuals do not engage in activities that may compromise their professional responsibilities, cause conflicts of interest, or divert their attention from their primary duties to their clients.
The registered rep’s outside business activity may create a conflict of interest with their obligations to their clients. This conflict of interest could result in the registered individual making recommendations or taking actions that benefit their outside business activities at the expense of their clients’ interests. Engaging in an outside business activity without approval may also divert the registered individual’s attention away from their primary duties to their clients. This diversion of attention could result in the registered individual neglecting important responsibilities, such as conducting due diligence on investments or monitoring their clients’ accounts.
FINRA BrokerCheck: Keith Baron
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.
According to Keith Baron’s FINRA BrokerCheck report, he reportedly has 11 disclosures on his broker record, including 6 customer complaints. The most recent customer complaint alleges misappropriation of investor funds. The claim was reportedly settled for $175,000 in November 2022. Baron is not currently registered as a broker, according to FINRA.
Baron was reportedly affiliated with the following firms during his career, among others:
08/13/2015 – 01/07/2022, EQUITY SERVICES, INC. (CRD#:265), JERICHO, NY, B, 11/02/2011 – 08/24/2015, PARK AVENUE SECURITIES LLC (CRD#:46173), WOODBURY, NY B, 03/12/2009 – 10/06/2011, NYLIFE SECURITIES LLC (CRD#:5167), MELVILLE, NY
Filing a Complaint against your Brokerage Firm
FINRA has regulations in place to ensure advisors act in the best interest of their clients (known as the fiduciary duty), but it’s wise for investors to stay informed and ask for clarification about any recommendations made by their advisor.
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.
If you have suffered investment losses with Keith Baron, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses. For more information, please visit our website, www.whitesecuritieslaw.com.
