Background Of David Allen Walters
Walters is not currently registered or associated with any FINRA member firm. However, he remains subject to FINRA’s jurisdiction pursuant to Article V, Section 4 of FINRA’s By-Laws.
Walters first became registered with FINRA in 1985. In June 2017, he became registered with FINRA as a General Securities Representative, General Securities Principal, Investment Banking Representative, and Introducing Broker-Dealer Financial and Operations Principal through an association with Advisory Group Equity Services Ltd. (CRD No. 15427) (AGES). In October 2018, he also became registered as an Investment Banking Principal and an Operations Professional through AGES. On November 19, 2018, AGES filed a Uniform Termination Notice for Securities Industry Registration (Form U5) stating that Walters had been discharged “due to a violation of the Firm’s Written Supervisory Procedures” and FINRA rules regarding “Private Securities Transactions.”
From March 2019 to September 2019, Walters was registered with FINRA through an association with another member firm.
Activity(s) Reported – David Allen Walters
FINRA Rule 3280 requires that prior to “participat[ing] in any manner” in a private securities transaction, a person associated with a member firm shall provide written notice to his or her firm “describing in detail the proposed transaction and the person’s proposed role therein[.]” FINRA Rule 3280 defines a private securities transaction as “any securities transaction outside the regular course or scope of an associated person’s employment with a member[.]” A violation of FINRA Rule 3280 is also a violation of FINRA Rule 2010, which requires FINRA members and associated persons to “observ( high standards of commercial honor and just and equitable principles of trade.”
From October 2017 to June 2018, and while Walters was registered through AGES, Walters participated in four private securities transactions, in which individuals investe, a total of $450,000 in exchange for Series A Preferred Units of a company for which Walters served as Executive Chairman (the Company). The investors were directed to mail their completed subscription documents and subscription payment to Walters, or t( evidence to Walters that their payment was wired directly to the Company. Further, investors were told to direct any questions about their subscriptions to Walters by mail, phone, or email. Walters emailed the term sheet and the master financial projections foi the Company to one investor less than a month before his investment. Walters signed tl-subscription agreement for each of the four investors in his capacity as Executive Chairman of the Company. Walters did not receive selling compensation, and none of t four investors was a customer of AGES. Walters’ participation in the four private securities transactions was outside the regular course and scope of his employment witl AGES.
Walters did not provide prior written notice to AGES of the four private securities transactions or his role in the transactions. While Walters disclosed the Company to AGES as an “outside business activity,” he told the firm that the source of its capital would be “personal assets” rather than investments by third parties.
Therefore, Walters violated FINRA Rules 3280 and 2010.
Penalties And Sanctions
■ a four-month suspension from associating with any FINRA member in any capacity and
■ a $5,000 fine.
The fine shall be due and payable either immediately upon reassociation with a member firm or prior to any application or request for relief from any statutory disqualification resulting from this or any other event or proceeding, whichever is earlier.
Respondent specifically and voluntarily waives any right to claim an inability to pay, nc or at any time after the execution of this AWC, the monetary sanction imposed in this matter.
Respondent understands that if he is barred or suspended from associating with any FINRA member, he becomes subject to a statutory disqualification as that term is define in Article III, Section 4 of FINRA’s By-Laws, incorporating Section 3(a)(39) of the Securities Exchange Act of 1934. Accordingly, he may not be associated with any FINRA member in any capacity, including clerical or ministerial functions, during the period of the bar or suspension. See FINRA Rules 8310 and 8311.
The sanctions imposed in this AWC shall be effective on a date set by FINRA.
Recent Activity(s)Of The Individual/Firm
From October 2017 to June 2018, and while he was registered through AGES, Walters participated in four private securities transactions without providing prior written notice to AGES. Walters thereby violated F1NRA Rules 3280 and 2010
David Allen Walters has been involved in fraudulent activities and is an unsafe professional entity. We strongly recommend you avoid any association with such a shady figure.
- Shady Activity
- Swindling Activity Reported By Clients
- Under Govt. Organization's Radar
- High Risk of Fraud