November 19, 2020
On October 13, 2020, former registered representative Troy Baily consented to a bar imposed by the Financial Industry Regulatory Authority (FINRA) to resolve allegations that he violated securities industry rules by engaging in undisclosed and unapproved private securities transactions (PSTs).
Baily has been associated with five different FINRA member firms within the last ten years, including Vision in Stamford, Connecticut from January 2010 to March 2011 and Ameritas Investment Corp. in Lincoln, Nebraska from Aril 2011 to December 2011. Since then, he has been associated with three other firms in Omaha, Nebraska: 1) Proequities, Inc. from March 2012 to December 2012; 2) AXA Advisors, LLC from December 2012 to April 2014; and 3) Sagepoint Financial, Inc. from April 2014 to September 2014 and again from November 2016 to March 2018. He is not currently registered with a FINRA member firm.
According to the Letter of Acceptance, Waiver and Consent (AWC), Baily solicited four investors, three who were Sagepoint customers, to purchase $210,000 in Future Income Payments, LLC (FIP) securities. The company represented itself as a structured cash flow investment in which they purchased pensions at a discount and sold portions of those pensions as a “pension stream” to investors, promising a 7% or 8% rate of return on their investment. Baily received $8,900 in commissions for these transactions. FINRA alleges Baily did not seek prior approval from Sagepoint to engage in these PSTs, thus he violated FINRA Rules 3280 and 2010.
In April 2018, FIP ceased business even though the company owed $300 million in unpaid investor payments. FIP and its owner, Scott A. Kohn, were charged in federal court with conspiracy to engage in mail and wire fraud.
By signing the AWC, Baily consented, without admitting or denying the allegations made against him, to a six-month suspension from associating with any FINRA member firm in any capacity and a $5,000 fine. One customer complaint has been brought forth regarding the FIP scheme. The customer requested $135,000 in damages.
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