The regulator has barred Kenneth Tyrrell on charges that he participated in private securities transactions “without providing prior written notice” to his employer UBS.
The Financial Industry Regulatory Authority (FINRA) has barred a veteran investment advisor and broker, who in turn has submitted a formal settlement letter of acceptance, waiver and consent.
However, Kenneth S. Tyrrell, the former broker-advisor, while accepting his banishment by FINRA, also says that he neither admits to nor denies FINRA’s alleged violations.
Tyrrell is charged with violating FINRA rules 3280 and 2010, which together prohibit a member from “participating in any manner in private securities transactions without providing prior written notice to his or her member firm,” which in his case is UBS.
In all, Tyrrell, the now-barred veteran, had approximately 23 years of experience at a total of seven firms, according to FINRA’s BrokerCheck service.
Specifically, Tyrrell is charged with participating in “eleven undisclosed private securities transactions with a [high-net-worth] customer,” between approximately May 2011 and August 2016, according to FINRA. Those transactions totaled more than $13 million.
The l1 securities transactions “involved the customer’s investment in private equity and debt securities in companies in a variety of industries as part of the customer’s overall financial plan,” according to FINRA. The regulator also notes that, although Tyrrell was “not compensated for these transactions, he participated in them by, among other things, referring investments to the customer; conducting due diligence and relaying his views on the transactions at the customer’s request; helping the customer establish certain holding companies to make the investments; and facilitating transfers of funds from the customer’s UBS accounts to the companies.”
He also engaged in five “outside business activities” with the same customer, all without providing the required prior written notice to UBS, according to FINRA, which specifies that three of the outside business activities involved Tyrrell, “at the [high-net-worth] customer’s request, serving as an officer of the holding companies the customer used to make his outside investments. A fourth was a company Tyrrell co-founded in which the customer invested. The fifth was a concierge services company owned by Tyrrell’s spouse with which Tyrrell was also involved.”
The concierge services company was formed in June 2013, “in part to provide personal services to Tyrrell’s customer,” FINRA says. “Tyrrell’s involvement included finding staff to provide services to the customer; determining the salaries of the company’s staff, including his spouse; and wiring funds to the company from his customer’s UBS accounts. Between June 2013 and June 2016, Tyrrell caused approximately $498,000 to be transferred from the customer’s UBS accounts to the concierge services company to pay for goods and services on the customer’s behalf. In June 2016, the customer raised questions about the concierge services company. Thereafter, Tyrrell performed an audit of the concierge company’s expenditures and returned approximately $130,000 to the customer’s UBS accounts, consisting of the balance of the customer’s unspent funds held in the concierge service company’s bank account, and repayment of certain operating expenses which the concierge services company had charged to the customer.”
In his mandated compliance questionnaires, Tyrrell also “failed to disclose his participation in the [various] private securities transactions and outside business activities,” FINRA adds.
Tyrrell was registered with UBS Financial Services, Inc. from November 2008 until August 2016, FINRA says, after which the firm reported the “termination of his registrations” for prohibited conduct. He was then registered with Cary Street Partners for one year (2016-2017).
Cary Street is a Richmond, Va.-based LLC, wholly owned by Luxon Financial.
At the end of September 2017, when Cary Street closed on $18.9 million in new financing, it also announced that, going forward, it had rebranded its “parent company as Luxon Financial LLC and [would] be operating its asset management and insurance operations under the Luxon brand while continuing to use the Cary Street Partners name for its core wealth management businesses.”
As of that September date, Luxon Financial had “three operating divisions: Cary Street Partners (Wealth Management), Luxon Insurance Services (Wholesale Insurance), and Luxon Global (Asset Management),” the firm says.
FTF News contacted UBS for comment. By deadline there had been no reply.
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