FINRA bars former UBS advisor over $13M in undisclosed client investments
FINRA has barred a former UBS advisor for participating in private securities transactions and outside business activities with a high-net-worth client without disclosing his external business dealings to the firm, according to his recent settlement with FINRA.
Kenneth Tyrrell allegedly engaged the client in 11 private securities transactions involving private equity and debt securities in companies spanning a wide variety of industries. The undisclosed transactions, which totaled more than $13 million, were part of the client's overall financial plan, FINRA alleged.
Tyrrell, who worked for UBS in Vienna, Virginia, purportedly referred the investments to the client, helped the client establish certain holding companies to make the investments, and facilitated transfers of funds from the client's UBS accounts to the companies, according to FINRA.
The regulator also chided Tyrrell for engaging in five outside business ventures without providing prior written notice to UBS, as required by FINRA and the firm. Tyrell allegedly served as an officer of three holding companies in which the client invested and was co-founder of a fourth. The fifth outside business venture involved an undisclosed concierge service company owned by his wife that was formed in part to provide personal services to Tyrell's client, FINRA claimed.
Tyrrell allegedly found staff to provide concierge services to the client and determined staff salaries, including that of his wife. He also caused $498,000 to be transferred from the client's UBS accounts to the concierge services company to pay for goods and services on the client's behalf, FINRA claimed.
In June 2016, prompted by questions the client raised about the concierge services company, Tyrrell allegedly returned approximately $130,000 to the client's UBS accounts. The reimbursement purportedly was for operating expenses that the company had charged to the client, according to FINRA.
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The private securities transactions and outside business activities occurred between May 2011 and August 2016, FINRA said.
The regulator also scolded Tyrrell for falsely certifying in multiple compliance questionnaires to UBS that he had disclosed all of his private securities transactions and outside business activities when in fact he hadn't.
Neither Tyrrell nor his attorney, Jeffrey Robertson of law firm Schulte Roth & Zabel, had any comment.
In his settlement with FINRA, Tyrrell neither admitted nor denied the allegations but consented to an entry of FINRA's findings.
Tyrrell worked for UBS from November 2008 to August 2016, when he was discharged over the undisclosed outside activities and investments, according to BrokerCheck records. He subsequently joined Carey Street Partners but was permitted to resign a year later when the firm learned of FINRA's investigation.
Marsha Askins, a spokeswoman for UBS, had no comment on the matter.