Former Cetera Advisors Broker Scott Kozak Suspended for Private Securities Transactions
Scott Patrick Kozak of Highlands Ranch, Colorado submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for two years for allegedly engaging in private securities transactions, known also as selling away. Between 2011 and 2014, while registered with Cetera Advisors LLC, Scott Kozak allegedly engaged in private securities transactions without written notice or approval from his member firm. According to FINRA, Mr. Kozak solicited Cetera customers and registered representatives to invest $1,166,000 in two companies’ securities. Mr. Kozak also invested his own money in the companies. Further, Mr. Kozak was found by FINRA to have solicited investments in promissory notes from seven Cetera customers, who collectively invested $380,000 in the promissory notes. NASD Rule 3040 prohibits associated persons from participating in any manner in a private securities transaction outside the regular course or scope of their employment without first providing written notice to the member firm. The written notice must describe in detail the proposed transaction and the person’s proposed role therein, and whether he has received or may receive selling compensation in connection with the transaction. A violation of NASD Rule 3040 is a violation of FINRA Rule 2010, which requires members and associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
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