On November 1, 2017, the Financial Industry Regulatory Authority (“FINRA”) disclosed that registered representative Masood “Mike” Husain Azad (“Mike Azad”) has been barred from the securities industry following a FINRA enforcement proceeding. Specifically, without admitting or denying FINRA’s findings, “[A]zad consented to the sanction and to the entry of findings that he failed to provide FINRA requested documents and information in connection with its investigation into allegations of misconduct by Azad while associated with his member firm… the allegations included that Azad participated in an unapproved private securities transaction by soliciting investments and/or directly investing in an electronic data security company and engaged in outside business activities involving the company….”
Publicly available information through FINRA indicates that Mike Azad (CRD# 4798445) worked in the securities industry from August 2004 – June 2017. During this time frame, Mike Azad was affiliated with the following brokerage firms: Voya Financial Advisors, Inc. (CRD# 2882) (2004-2015) and, most recently, First Allied Securities, Inc. (“First Allied”) (CRD# 32444) (2015-2017). According to FINRA BrokerCheck, Mr. Azad was discharged from his employment with First Allied on May 19, 2017, concerning allegations of violating firm policy “[r]elating to borrowing money from clients, engaging in an unapproved private securities transaction and outside business activity.”
Brokerage firms like First Allied have a duty to ensure that their registered representatives are adequately supervised. In this regard, brokerage firms must take reasonable steps to ensure that their financial advisors follow all applicable securities rules and regulations, in addition to internal policies and procedures. In those instances when brokerage firms fail to adequately supervise their registered representatives, they may be held liable for losses sustained by investors.