FINRA sanctioned a former Securities America representative, Frank A. Gutta, for failing to disclose that he owned and operated a Florida corporation, Business Investors, Inc. (BII).  Mr. Gutta participated in numerous private securities transactions without notice or approval from Securities America, his employer at the time.

FINRA’s investigation found that during the period from September 2003 through at least January 2008 he operated Business Investors, Inc., without any notice to SAI.  He offered and sold BII promissory notes to 19 individuals, nine of which were SAI customers, for proceeds of approximately $2.9 million.  The proceeds were used to finance the creation and/or operation of various small businesses, including gas stations and a dollar store.  The BII promissory notes were not sponsored or approved by SAI.   Additionally, Mr. Gutta recommended BII Promissory notes to at least one of his SAI customer without having a reasonable basis to believe that the investment was suitable for her.

FINRA imposed a two-year suspension from association with any FINRA member in any capacity upon Mr. Gutta.  Since Mr. Gutta was granted a discharge in bankruptcy on June 11, 2010, no monetary sanctioned was placed.