James Burton Terminated over Private Transaction

James Burton (CRD# 5051310[1]), formerly a broker registered with Farmers Financial Solutions, departed that firm over allegations he failed to disclose a private securities transaction. MDF Law is investigating the former Bakersfield, California financial professional for similar conduct. We urge investors with concerns to contact us for a free consultation.

To learn more about the circumstances surrounding Mr. Burton’s termination from Farmers Financial, continue reading. This post is based on a November 29, 2023 review of his Financial Industry Regulatory Authority (FINRA) BrokerCheck profile.

Why Did Farmers Financial Solutions Fire James Burton?

On October 20, 2023, Farmers Financial Solutions filed a disclosure concerning its firing of Mr. Burton. According to the disclosure, the firm fired him after it determined he failed to disclose “a personal investment in a private securities transaction.” He also allegedly failed to disclose “activities related to promissory notes as an outside activity,” in violation of FINRA Rules 3270 and 3280, as well as firm policies and procedures.

What Are Outside Business Activities?

FINRA records do not offer any additional context regarding Mr. Burton’s departure from Morgan Stanley. However, the underlying circumstances describe outside business activities. As FINRA Rule 3270[2] explains, brokers may not participate in business activities beyond the scope of their relationship with their member firm, “unless he or she has provided prior written notice to the member, in such form as specified by the member.” Firms employ various measures to monitor their representatives’ participation in outside business activities, like regular questionnaires and reviews of social media and email communications.

Broker-dealer firms also generally look out for possible red of undisclosed outside business activities, like changes in a broker’s job performance or lifestyle. Representatives who engage in unapproved outside business activities may be subject to disciplinary action from their member firm or from securities regulators. 

What Are Private Securities Transactions?

As FINRA Rule 3280 explains, private securities transactions are “any securities transaction outside the regular course or scope of an associated person’s employment with a member.” The rule prohibits brokers like Mr. Barton from participating in such transactions, unless they adhere to certain requirements. In addition to giving their member firm prior written notice regarding the proposed transaction, they must also receive their firm’s approval for transactions involving selling compensation, and then document the transaction in the firm’s books and records.

FINRA: Burton Last Based in Bakersfield, California

James Burton launched his career as a broker in 2007. That was the year he joined Farmers Financial Solutions’ branch office in Bakersfield, California, where he remained until his termination in 2023. He has yet to register with any other broker-dealer firm, according to his BrokerCheck report. With 16 years of experience as a broker under his belt, he has completed one state securities law exam and two general industry/products exams. 

MDF Law Advocates for Investor Rights

Did you lose money working with James Barton? MDF Law may be able to help you recover it. Contact our seasoned investment fraud attorneys at 800-767-8040 for a consultation about your case. Our clients only pay a fee if they recover lost funds, and we currently offer free consultations nationwide. You may have a limited window to file a FINRA arbitration claim, so don’t delay: call MDF Law today.