Securities Arbitration Lawyer Blog
FINRA has barred former NTB Financial Corporation (“NTB”) broker George Louis McCaffrey III from the securities industry. Mr. McCaffrey was expelled from the brokerage industry for providing false information to FINRA during a prior investigation and for participating in $270,000 of private securities transactions without prior written disclosure to and approval from his firm.
If you have lost money with George Louis McCaffrey III, or NTB Financial Corporation, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
FINRA Letter of Acceptance, Waiver, and Consent
George Louis McCaffrey III and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on June 25, 2021. According to the AWC, Mr. McCaffrey provided false information to FINRA during a prior investigation. Additionally, Mr. McCaffrey allegedly participated in $270,000 of private securities transactions without prior written disclosure to and approval from his firm.
During a prior FINRA investigation and AWC, dated September 10, 2018, Mr. McCaffrey consented to findings that he violated FINRA Rules 3280 and 2010 by participating in twenty-two undisclosed private securities transactions in which nine investors, including one firm customer, purchased $1.775 million in debt and equity securities. As part of its investigation, pursuant to Rule 8210, FINRA requested that Mr. McCaffrey provide a “list of all outside business activities in which you engaged away from NTB.” For each outside business activity, FINRA Enforcement requested that Mr. McCaffrey provide, among other things: (1) a description of the outside business; (2) the purpose of the outside business; and (3) a description of all capital raising and capital formation activities he participated in on behalf of the outside business.
Mr. McCaffrey’s then-attorney responded that Mr. McCaffrey had “no other outside business activities other than his involvement in [the subject company].” Mr. McCaffrey did not disclose any other outside business activities in response to the FINRA 8210 Request. Mr. McCaffrey produced a chart of individuals who invested in the subject company during the relevant period identified in FINRA’s request, detailing the amount of each investment and the compensation he received. Mr. McCaffrey did not identify any other private securities transactions in which he had participated other than the twenty-two transactions on the chart, which formed the basis of his prior AWC.
Mr. McCaffrey, however, participated in private securities transactions in which two additional individuals, who were not NTB customers, purchased $170,000 of securities issued by the company that was the subject of his prior AWC. Mr. McCaffrey never sought nor received NTB’s permission to participate in these private securities transactions. Additionally, contrary to representations he made, Mr. McCaffrey participated in another $100,000 private securities transaction with an individual, who was not an NTB customer, involving a separate, but related company during his association with NTB. Mr. McCaffrey never sought nor received NTB’s permission to participate in this private securities transaction either.
By providing false information to FINRA in connection with an investigation, Mr. McCaffrey violated FINRA Rules 8210 and 2010. Moreover, by participating in $270,000 of private securities transactions without prior written disclosure to and approval from his employer member firm, Mr. McCaffrey violated FINRA Rules 3280 and 2010.
You can read more about private securities transactions here.
FINRA Rules 8210, 3280 & 2010
FINRA Rule 8210(a)(1) states, in relevant part, that FINRA may “require a … person subject to FINRA’s jurisdiction to provide information … in writing … with respect to any matter involved in…[a FINRA] investigation…” Providing false information and failing to provide information in connection with an investigation violates FINRA Rule 8210.
Conduct that violates Rule 8210 is a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
FINRA Rule 3280(b) prohibits an associated person from participating in any manner in a private securities transaction unless, prior to participating, the associated person provides written notice to his member firm describing in detail the proposed transaction and the associated person’s proposed role and stating whether he has received or may receive selling compensation in connection with the transaction. FINRA Rule 3280(e) defines a private securities transaction as any securities transaction outside the regular course or scope of an associated person’s employment with a member. A violation of FINRA Rule 3280 also constitutes a violation of FINRA Rule 2010.
George Louis McCaffrey III (CRD#: 847377)
Mr. McCaffrey had 37 years of experience in the securities industry. He was registered as a broker with NTB Financial Corporation in Englewood, CO, between July 1989 and October 2017, when the firm terminated him.
The AWC indicates that in an Amended Uniform Termination Notice For Securities Industry Registration (Form U5) filing dated September 24, 2019, almost two years after Mr. McCaffrey’s termination, NTB disclosed its receipt of a customer complaint alleging that in 2004 and 2005, Mr. McCaffrey recommended that the customer lend money to a private company, using the assets in his IRA brokerage account. The customer complaint was unrelated to the private securities transactions that were the subject of Mr. McCaffrey’s AWC.
In an Amended Form U5 filing dated May 4, 2021, NTB disclosed its receipt of an arbitration claim alleging that Mr. McCaffrey solicited additional individuals to invest in the company that was the subject of his prior AWC. Mr. McCaffrey did not disclose these private securities transactions during his association with NTB.
Mr. McCaffrey’s FINRA CRD shows a total of three customer disputes, including one filed on April 19, 2021, which is still pending. Mr. McCaffrey is alleged to have solicited private securities transaction investments in an unregistered company in approximately 2015 (dates unspecified) and that NTB Financial supervision failed to detect his outside activity. The claim seeks $220,000 in damages.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with George Louis McCaffrey III, or NTB Financial Corporation, contact FINRA arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.