Initiated By
FINRA
Allegations
Without admitting or denying the findings, LeBoeuf consented to the sanctions and to the entry of findings that he participated in private securities transactions without providing prior written notice to, and receiving written approval from, his member firms. The findings stated that LeBoeuf used his personal email to solicit his firm client, a family member, to invest in a pooled real estate investment fund. In addition, LeBoeuf solicited investors, including firm clients, to invest in a convertible promissory note issued by a software company and sent emails introducing the investment and recommending investment amounts to his investors. LeBoeuf also formed a limited liability company to facilitate investments in the software company and ensured the investors' funds were wired to the company. Three firm clients invested a total of $750,000 in the software company's convertible promissory notes. LeBoeuf did not receive selling compensation from any of the investments in the real estate fund or software company. In addition, LeBoeuf falsely attested on annual compliance questionnaires that he had not used a personal device to communicate with clients using software not available from the firm. The findings also stated that LeBoeuf engaged in an outside business activity (OBA) without providing prior written notice to the firm. While associated with the firm, LeBoeuf filed articles of incorporation for a limited liability company with the Ohio Secretary of State. LeBoeuf was the authorized signor for the company's bank account and was identified in the company's operating agreement as the member, sole manager, and partnership representative for tax purposes. The findings also included that, in the course of soliciting potential investors in the software company, LeBoeuf's communications did not provide potential investors with the required sound basis to evaluate all of the relevant facts with respect to the potential investment. LeBoeuf emailed a company presentation to investors, including several firm customers, that did not adequately address the illiquidity of the proposed investment or the possibility of investment loss. Further, the presentation failed to identify the assumptions, limitations, impediments, and restrictions that could inhibit the achievement of a yearly revenue forecast.
Resolution
Acceptance, Waiver & Consent(AWC)
Sanctions
Civil and Administrative Penalty(ies)/Fine(s)
Amount
$12,500.00
Sanctions
Suspension
Registration Capacities Affected
All Capacities
Duration
12 Months
Start Date
12/6/2021
End Date
12/5/2022
Broker Comment
On November 23, 2021 William LeBoeuf (Respondent) filed a letter of Acceptance, Waiver and Consent in a matter pursuant to FINRA Rule 9216 for the purpose of proposing a settlement of the alleged rule violations described below. This AWC is submitted on the condition that, if accepted, FINRA will not bring any future actions against Respondent alleging violations based on the same factual findings described in this AWC.
In 2017, while associated with Merrill Lynch, Respondent participated in a private securities transaction by soliciting a firm client, a family member of the Respondent, to invest in a pooled real estate investment fund. Additionally, in 2019 while associated with Cetera, Respondent participated in a private securities transaction by facilitating investments of three Cetera customers in a convertible promissory note issued by Company B, a software company. Respondent's customers at ML and Cetera invested a total of $1 million in the two securities. Respondent participated in these private securities transactions without notifying and receiving prior written approval from ML or Cetera. As a result of the conduct, Respondent violated FINRA Rules 3280 and 2010.
In 2019, Respondent formed and became the sole manager of an LLC that he created for the purpose of pooling and making investments in the convertible promissory note issued by Company B. Respondent did not provide Cetera with notice or obtain prior approval before engaging in this outside business activity. As a result, he violated FINRA rules 3270 and 2010.
Additionally, in the course of facilitating investments in Company B, Respondent emailed a presentation to potential investors and did not clearly explain the applicable risks to investors in violation of FINRA rules 2210(d)(I)(A) and 2010.
Respondent did not receive selling compensation in these matters, and there were no client complaints related to these matters.
FINRA has accepted the AWC, and a instituted a suspension of 12 months, beginning 6Dec2021 and ending 5Dec2022, from participating in the securities industry with a FINRA firm and levied a $12,500 fine in order to be reinstated with a FINRA firm.;
