The Financial Industry Regulatory Authority says it has fined and suspended a former LPL Financial advisor who got involved with a tequila-producing firm without letting LPL know.
Michael Mandel joined the financial services industry in 2005 and joined LPL from Royal Alliance Associates in 2015, according to a letter of acceptance, waiver and consent published by the industry’s self-regulator.
LPL discharged Mandel last month and filed a Form U5 termination notice explaining that the discharge was over allegations that he “[s]olicited and introduced customers and non-customers to investment into a Firm-unapproved company, without prior notice to or approval from Firm, in violation of Firm policy," according to Finra.
The self-regulator alleges that between around May 2014 and October 2016, Mandel convinced 18 investors — seven of whom were LPL customers — to invest around $815,000 in a tequila producer, without giving written notice to or getting approval from LPL, as per Finra regulations, the self-regulator says. To do so, he allegedly invited the investors to events for the company, introduced them to the founder and gave them documents about the investment, according to the letter of acceptance.
In return, Mandel allegedly received a little over $5,600 from the tequila company, although he also expected to get a part of the founder’s equity in the firm, the self-regulator says.
But last November, the founder of the tequila company pleaded guilty to making false and misleading statements to investors and misusing investor funds, Finra says.
Last week, Mandel agreed to a seven-month suspension and to pay disgorgement of $5,635.35 plus interest as well as a $5,000 fine, without admitting or denying the findings, according to the letter of acceptance.
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