LPL Financial terminated Houston, Texas-based stockbroker James “Jeb” Bashaw in September for allegedly selling investments that LPL had not approved. Such misconduct often is referred to as “selling away” and is one of the more common forms of stockbroker misconduct. Bashaw reportedly was moving his business to Wunderlich Securities Inc., but it now appears that he will be doing business through a small brokerage firm International Assets Advisory. According to SEC filings, that brokerage firm had revenues of only $19 million in 2013.

“Investors should be careful when entrusting their money to a small broker-dealer,” said securities arbitration attorney Jeffrey Kaplan. “Small brokerage firms often keep very little capital in the firm and they are not required to carry liability insurance.” Many “selling away” situations lead to investment losses and FINRA arbitration claims against small brokerage firms, and the brokerage firm’s insurance policy often is the only hope for investors to recover their investment losses. “While we do not know whether International Assets Advisory carries liability insurance, many small brokerage firms carry either no insurance or only have a very small policy. And even then, many insurance policies exclude coverage in certain selling away situations. Coupled with a broker who already has been accused of “selling away” misconduct, before moving their accounts to a small brokerage firm, investors should request and obtain information about the brokerage firm’s liability insurance coverage,” said attorney Kaplan.

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From its offices in Miami and Los Angeles, Dimond Kaplan & Rothstein has represented numerous investors in FINRA arbitration cases when the investors lost money after a broker sold investment that the brokerage firm had not approved. If you lost money in an investment that James “Jeb” Bashaw sold to you please feel free to contact us for a free consultation.

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