SagePoint Financial fired its stockbroker Grant Christopher Birkley last August when he admitted to acting without the approval of the broker-dealer and making referrals to an external manager. This admission is tantamount to Birkley’s “selling away.”
SagePoint Financial Background
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Sagepoint Financial was established in 1970 as a Broker-dealer engaged in stock sale. In 2005 the firm also formally registered with the Securities and Exchange Commission as an Investment Consulting firm. This firm belongs to Advisor Group Inc., one of the largest networks of independent broker-dealers in the United States. These are wholly owned subsidiaries of a consortium of investors owned by the firm owners.
SagePoint Financial Complaints
SagePoint has 25 disclosures. The most recent disclosure involves situations from June 2020. FINRA alleged it is failing at creating a supervisory system. As a fee-based firm, many advisors affiliated with SagePoint Financial can earn commission through sales of insurer insurance services and stock offerings. However, the firm’s inherent fiduciary obligation legally requires the firm’s action to always protect its clients’ good interests.
FINRA Case 2018056858101: As a result of the foregoing, SagePoint violated NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on and after December 1, 2014), and FINRA Rule 2010.
Respondent also consents to the imposition of the following sanctions:
• a censure;
• a fine of $300,000; and
• restitution to the customers listed on Attachment A in the total amount of $1,315,373.01, plus interest.
What is selling away?
When a broker sells investments not approved by the broker-dealer he is affiliated with, the practice is referred to as ‘selling away.’ It is considered to be an inappropriate practice as it can carry a higher risk for the investor. Broker-dealers are expected to carry out due diligence before approving security for sale by its representatives. Unapproved security could mean that the due diligence was either not done or done and the security was found unsuitable for a recommendation.
Though the practice also violates securities laws, it continues to raise its ugly head now and again as brokers continue to indulge in it. The motivation seems to be, as usual, the lure of easy money, as riskier securities usually pay higher sales commissions. Advisors are also able to avoid the firm’s oversight, which they need to submit themselves to when they sell approved securities.
Grant Christopher Birkley
A veteran of 21 years in the industry, Birkley has earlier worked for Wells Fargo Clearing Services, Merrill Lynch, Pierce, Fenner & Smith, and Shepherd Financial Group.
He has a past history of arbitration claims, as revealed by his BrokerCheck report. He is facing claims in excess of $2.3M, constituted mainly by the following two, where he has been named:
- $900K in damages have been sought by a claimant who contends that he was sold a fund by Birkley that was not approved by SagePoint. This was in August 2020.
- $1.43M in damages have been sought by another claimant, with very similar allegations, also dating back to August 2020.
Birkley has been barred by the Financial Industry Regulatory Authority (FINRA) for an indefinite period after he refused to provide any information or documents while they were conducting a probe into his termination by SagePoint.
Investor advice
If you have had dealings with Grant Christopher Birkley or believe you have lost money as a result of similar ‘selling away’ transactions, you are advised to contact Haselkorn & Thibaut, who is investigating claims of investment losses involving customers of Birkley.
It might be pertinent to highlight that InvestmentFraudLawyer.com is also investigating claims on behalf of several clients who were sold investments in GPB Capital Holdings by other brokers of SagePoint, earning high commissions on the sale of investments in a company that turned out to be a huge Ponzi scheme of $1.8 billion, impacting 17,000 investors, many of them senior and retired.
You can reach our experienced investment fraud lawyers at 1-800-856-3352.
