Erez Law is investigating claims regarding James “Jeb” Bashaw (CRD #1251491, Houston, Texas). Bashaw was registered with LPL Financial LLC in Houston from November 2001 until his termination in September 2014. Investment News reports that Bashaw was terminated for several allegations including participating in private securities transactions without providing written disclosure to and obtaining written approval from LPL. Investment News also reports that Bashaw allegedly borrowed from a client and engaged in a business transaction that created a potential conflict of interest without providing written disclosure to and obtaining written approval from the firm.
Bashaw currently is registered with Wunderlich Securities, and his CRD states that he was terminated by LPL “for failure to follow firm policies and industry regulations.” In response to this CRD disclosure, Bashaw stated “I am home office supervised and have had 13 perfect audits. I am still unclear as to specifics.” Investment News reports that Bashaw was a highly successful broker with approximately two dozen advisers working under him in various offices. In 2011, Barron’s magazine ranked Bashaw the top financial adviser in Texas, with total assets of $3.8 billion, according to Investment News.
FINRA Rule 3040, formerly NASD Rule 3040, provides that a broker may only sell securities with the knowledge and approval of his or her firm. When a broker sells securities without processing the order through the firm and without the firm’s permission or knowledge, this violates FINRA rules and is known as “selling away.” Federal and state law define securities broadly. Therefore, even products such as leasing arrangements or promissory notes, may be securities which require firm approval. Selling away often involves investment securities that are in the form of a private placement or other non-public investment.
Erez Law successfully has litigated several selling away cases, notably Nasirdin H. Madhany and Zeenat N. Madhany, individually and as trustees of the Zeenat Madhany Revocable Trust and Dr. Nasirdin H. Madhany and Zeenat N. Madhany as Trustees of the Nasirdin H. Madhany Revocable Trust v. Scott Andrew King and Citigroup Global Markets, Inc. f/k/a Smith Barney, Case No. 10-04929. Erez Law recovered $3,147,334 as well as costs in the amount of $37,967.73 for investors who sustained losses in a failed real estate development recommended by their Smith Barney broker who sold away in violation of FINRA rules and industry rules. The recovery represented 100% of the investors’ losses. In addition, the arbitrators made Smith Barney liable for the amount the investors owed Wachovia Bank as guarantors of a loan made in connection with the failed development in an amount up to $10 million.
If you were a client of Bashaw, and have suffered investment losses or financial irregularities, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”