Tyler Delahunt Discharged By Merrill Lynch For “Selling Away”
According to Delahunt’s CRD Report, published online by FINRA, Merrill Lynch discharged Delahunt in August 2020. The allegations against Delahunt in connection with his discharge involve “improper solicitation of clients related to an outside investment and participating in financial arrangements involving clients.” Solicitation of clients for an outside investment not approved by a broker’s employing firm is often referred to in the securities industry as “selling away”.
After Delahunt’s Discharge, FINRA Initiated an Investigation
FINRA began an investigation after receiving paperwork from Merrill Lynch with the reasons for his termination. According to FINRA’s Letter of Acceptance, Waiver, and Consent with Delahunt (AWC), FINRA was investigating “whether Delahunt had solicited clients in a private securities transaction without approval of Merrill Lynch and whether he had accepted loans or other funds from clients without notice to his firm.” The AWC indicates that Delahunt failed to respond to FINRA’s inquiry, in violation of FINRA Rules.
As a result of Delahunt’s failure to participate in FINRA’s investigation, Delahunt was barred from acting as a broker or otherwise associating with a broker-dealer firm.
Selling Away And Brokers Borrowing From Customers
The allegations leading to Delahunt’s discharge from Merrill Lynch and bar from the brokerage industry included “selling away” and entering into improper financial relationships with customers. These are both serious issues facing the brokerage industry and they pose serious financial risks to investors.
Selling Away
Some brokers improperly obtain their customers’ money by “recommending” unregistered investments. This form of fraud is often referred to in the industry as “selling away.” This is when a broker recommends an investment that was never registered or approved by the broker’s employing firm, which is concealed from the customer. These unapproved “investments” are often illegitimate or entirely fake business ventures and/or Ponzi schemes.
Brokerage firms have an obligation to supervise their representatives in order to prevent these types of schemes. This includes taking steps and enacting protocols to ensure that representatives follow securities rules and regulations as well as internal policies and procedures. Failure to uphold these standards could render the brokerage firm liable for the losses suffered by customers.
Borrowing Money from Customers
Brokers also steal money from customers by convincing customers to lend them money. While not necessarily “theft” in the legal sense, brokers sometimes take advantage of the trusting relationship they develop with customers and convince them to lend the broker money, without the intent to ever repay the loans.
FINRA rules prohibit brokers from borrowing money from customers unless permitted by the firm and specific written firm procedures are followed. These rules are designed to protect investors—particularly those who are elderly or vulnerable—from being taken advantage of. For more information about the risks posed by these improper financial arrangements, see Silver Law Group’s page on broker borrowing.
Did You Invest With Tyler Delahunt?
Silver Law Group represents investors in securities and investment fraud cases nationwide. Our lawyers are and represent investors who have been the victims of selling away, improper loan arrangements, and a variety of other broker misconduct. If you have any questions about how your savings have been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingency fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today to find out how we can help.