FINRA

Taylor was named a respondent in a FINRA complaint alleging that he engaged in an undisclosed and unapproved outside business activity with a dealer involving the sale of precious metal bullion coins. The complaint alleges that Taylor failed to disclose the outside business activities in writing, via an outside business request form to his member firm. The outside business activities included referring individuals to the dealer for the purpose of those individuals purchasing bullion coins and the dealer paying a referral fee as compensation. Taylor made referrals that involved the firm's customers. The firm's policy permitted its registered representatives to sell only products approved by it. In addition, the firm's sales practice manual prohibited firm registered representatives from assisting a customer in the purchase or sale of gold, silver or other precious metals. In connection with these referrals, the dealer paid referral fees to Taylor totaling approximately $10,081. The complaint also alleges that Taylor failed to reasonably supervise Padgett and Farmer by failing to enforce the firm's WSPs with regard to their participation in the referrals to the dealer. The firm's WSPs delegated to front line supervisors, including OSJ supervisors such as Taylor, specific responsibilities relating to supervision of registered representatives. Thereby, among other things, Taylor failed to take reasonable steps to ascertain that this activity was disclosed in writing to the firm as an outside business activity in the form required by it. Taylor also failed to take reasonable steps to ascertain that the referrals of firm customers to the dealer was an activity prohibited by firm policy.

Decision

Civil and Administrative Penalty(ies)/Fine(s)

$25,000.00

Monetary Penalty other than Fines

$8,459.81

Suspension

All Capacities

six months

10/21/2019

4/20/2020

Any supervisory capacity

six months

4/21/2020

10/20/2020

Hearing Panel decision rendered August 22, 2019 wherein respondent is fined $25,000, suspended from association with any FINRA member in all capacities for six months, suspended from association with any FINRA member in any supervisory capacity for six months, to run consecutively with his all capacities suspension, and ordered to pay costs, jointly and severally, of $8,459.81. The sanctions are based on findings that Taylor engaged in undisclosed outside business activities and was compensated for referring customers to a company marketing investments in precious metals without advance disclosure to his member firm. The findings stated that from these referrals, Taylor received at least $10,081 in referral fees. The findings also stated that Taylor failed to adequately supervise two individual's referral activity to ensure that they properly disclosed their outside business activity. The decision became final on October 9, 2019. Fines paid in full on December 23, 2019.

I had offered gold and silver bullion coins for more than 38 years through three different broker dealers, including Royal Alliance. I believed that I was approved for this activity as it was discussed during branch examinations and, at least at the outset, commissions were paid through the broker-dealer. This was never a hidden activity. No client harm or loss was ever alleged or discovered. It was disclosed in my ADV from 1999-2004 which was submitted to and acknowledged by Royal Alliance. I had an extended conversation with my supervisor on her annual visit to our office in December 2013. I told her the verbiage I used when discussing gold and silver with clients. She promised to get back to me on this issue, but I never heard anything further. The referral fees that I received during the time period of 1999 through 2016 was $10,081-the equivalent of $504/year. That is a minute fraction of a percent of total revenue over the many years. This was as a service to those clients who did not know who to trust in the gold and silver marketplace. No clients were harmed or suffered any loss. We voluntarily disclosed this activity to an auditor during a routine annual audit in July of 2016. I cooperated fully with Royal Alliance with full transparency and disclosure and assisted Royal Alliance in resolving this issue by complying and accepting their sanction. Royal Alliance contacted my clients both in writing and in phone calls looking to verify the statements I made regarding my activity and also to determine if any customer had a complaint - this did not result in any complaints and, to date, there have not been any regarding this (or any other activity) No client harm or loss was ever alleged or discovered. Furthermore, no ancillary complaints arose nor have any arisen to date. This is my 50th year in the business. My insurance license was obtained March of 1969 and my securities license in May 1969. I believed there was a selling agreement in place that allowed me to be paid commissions for the precious metal's transactions and, since they were paid by and through the broker-dealer (at least at the outset), it was not an Outside Business Activity. When I started engaging in precious metals transactions, I was affiliated with Financial Planners Equity Corporation who had a Selling Agreement. They were acquired by Integrated Resources Group, which was then acquired by Royal Alliance. I never changed broker dealers and believed the Selling Agreement carried through.

Allegation that there was a misrepresentation of the risks associated with a stop-loss order

$42,120.00

CUSTOMER COMPLAINT INVOLVING THE SALES OF PUBLIC LIMITED PARTNERSHIPS SOLD BETWEEN 1982 - 1986, TOTALLING $144,000 ACTUAL SALES, INVOLVING 3 CLIENTS.

$284,591.00

$87,500.00

THE PLAINTIFFS SIGNED A MUTUAL GENERAL RELEASE, RELEASING CHARLIE TAYLOR AND ROYAL ALLIANCE FOR ALL TRANSACTIONS BETWEEN THE PARTIES INCLUDING AUGUST PENSION INV, SIERRA REIT IV, FRANKLIN MONEY FUND, FRANKLIN US GOVT, FID FREEDOM, MUTUAL SHARES, SIERRA 83, NUVEEN AZ 212&214, FIRST CAPITAL, DAMSON OIL, PLM LEASING, RICI15, NATIONAL WESTERN, AND IN ANY OTHER INVESTMENT OF [CUSTOMER], [OTHER CUSTOMER NAMED] OR [OTHER CUSTOMER NAMED].