Caroline Mohan, aka, Caroline Reyes (CRD# 2429577) is a former registered broker and investment advisor. Her last known employer was LPL Financial LLC (CRD#:6413) of West Palm Beach, FL. She was previously employed as a broker with Invest Financial Corporation (CRD#:12984) of Palm Beach Gardens and Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD#:7691) of Lake Worth, FL. She has been in the industry since 2011.
Mohan resigned from LPL Financial while under internal review for possible involvement with an outside business activity that she failed to disclose to the firm. Additionally, she was also alleged to have participated in private securities transactions.
On March 11th, 2021, LPL Financial filed a uniform termination notice for securities industries registration, or a Form U5, stating that Mohan voluntarily resigned during an internal review. As a result, FINRA initiated an investigation, and requested on-the-record testimony from her. Mohan declined to provide this information, in violation of FINRA policies.
In response for Mohan’s refusal to provide on the record testimony, FINRA issued a sanction barring Mohan from association with any FINRA member in all capacities. Mohan signed a letter of Acceptance Waiver And Consent (AWC) letter on November 17th, 2021. The bar went into effect on November 22nd, 2021.
Mohan has no other disclosures in her CRD.
Why Are A Broker’s Outside Business Activities Concerning?
As a rule, When a broker recommends a security, you probably assume that has been reviewed and vetted by the firm for which they work.
However, if a broker is engaged in business activities outside of auspices of their firm, this can cause a problem for any recommended securities, especially if they are private transactions. This is especially true of there is a conflict of interest involved.
As a rule, brokers are required to disclose in writing to their firm notice of any outside business activities they are engaged in. In compliance with FINRA’s Rule 2010, brokers are required under this rule to disclose their outside affiliations, and “observe high standards of commercial honor and just and equitable principles of trade.”
These activities include working as an officer, director, partner, employee, consultant or as an independent contractor with any for profit or non-profit organization.
Additionally, working with outside business activities that are unrelated to securities can also cause a problem. The issue becomes how much time a broker is spending on that outside business activity in relation to their normal everyday client business.
Did You Invest With Caroline Mohan?
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