James Elroy Burton Jr Investment Fraud Investigation: Recover Losses from Jazzberry Digital Solutions Promissory Notes

FINRA Arbitration Filed Against Former Broker James Elroy Burton Jr (CRD# 5051310) for Selling Away and Unsuitable Investment Recommendations

If you invested in non-registered promissory notes from Jazzberry Digital Solutions, Inc. through former broker James Elroy Burton Jr (CRD# 5051310) of Farmers Financial Solutions, LLC in Bakersfield, California, you may be eligible to recover your investment losses through FINRA arbitration. A pending claim alleges that Burton failed to disclose risks associated with these promissory notes and engaged in “selling away” – recommending investments not approved by his brokerage firm.

Our investment fraud attorneys are investigating claims against James E. Burton Jr and can help you understand your legal options for recovery. Contact us today for a free consultation to determine if you might be entitled to compensation for your investment losses.

Key Facts About the James E. Burton Jr FINRA Arbitration Case

According to FINRA BrokerCheck records updated as of March 2025, James Elroy Burton Jr is currently facing a significant customer dispute that was filed on October 10, 2023. The pending FINRA arbitration (Case #23-02790) involves serious allegations:

• Misrepresentation of risks associated with Jazzberry Digital Solutions, Inc. non-registered promissory notes
• Selling away (recommending investments not approved by his brokerage firm)
• Potential damages of $110,000.00

This case is particularly concerning as Burton was terminated from Farmers Financial Solutions, LLC on October 20, 2023, specifically for “failing to disclose personal investment in a private securities transaction and activities related to promissory notes as an outside activity, violating FINRA Rules 3270, 3280 and Firm policy.”

Who is James E. Burton Jr? Background and Employment History

James Elroy Burton Jr is a former registered representative who is no longer registered with any brokerage firm. His most recent employment was with:

Farmers Financial Solutions, LLC (CRD# 103863)
Bakersfield, CA
Registered from July 2007 to October 2023

According to FINRA records, Burton has also been employed by:

• Farmers Insurance Group as an Agent (since June 2005)
• Pre-Paid Legal Services as an Independent Associate (since December 2001)

Burton held the following securities licenses before his termination:

• Series 6 (Investment Company Products/Variable Contracts Representative) – obtained July 25, 2007
• Series 63 (Uniform Securities Agent State Law Examination) – obtained June 20, 2007
• Securities Industry Essentials (SIE) – obtained October 1, 2018

Understanding “Selling Away” and Why It’s a Serious Violation

The allegations against James E. Burton Jr center around a practice known as “selling away,” which is prohibited under FINRA Rule 3280. Selling away occurs when a broker sells or recommends investments to clients that are not offered through or approved by their employing brokerage firm.

Why Selling Away Is Dangerous for Investors:

1. No Due Diligence: Brokerage firms typically conduct extensive due diligence on the investments they offer. When a broker sells away, investors lose this critical layer of protection.
2. No Supervision: The brokerage firm cannot supervise transactions they’re unaware of, eliminating an important safeguard against fraud or unsuitable recommendations.
3. High-Risk Investments: Products sold through selling away are often high-risk, speculative investments that legitimate brokerage firms would not approve.
4. Recovery Challenges: While brokerage firms can sometimes be held liable for selling away by their representatives, recovery can be more complex than with traditional investments.

In Burton’s case, the alleged selling away involved non-registered promissory notes from Jazzberry Digital Solutions, Inc., which Burton reportedly did not disclose to Farmers Financial Solutions as required by FINRA regulations and firm policy.

The Risks of Non-Registered Promissory Notes

The investments at the center of this dispute are non-registered promissory notes from Jazzberry Digital Solutions, Inc. These types of investments carry substantial risks that must be fully disclosed to investors:

1. Lack of Regulatory Oversight

Non-registered securities do not undergo the same rigorous registration process with the SEC as publicly traded securities. This means less transparency and fewer investor protections.

2. Limited Disclosure Requirements

Issuers of non-registered securities typically provide less comprehensive information about their financial condition, business operations, and risks than publicly traded companies.

3. Illiquidity

These investments often lack a secondary market, meaning investors may be unable to sell their holdings if they need to access their money before the note matures.

4. Higher Default Risk

Many companies issuing non-registered promissory notes are early-stage or financially troubled businesses seeking alternative funding sources, which significantly increases the risk of default.

5. Difficulty Valuing the Investment

Without market pricing or transparent financials, it can be nearly impossible for investors to determine the true value of their investment at any given time.

How Broker Misconduct Led to Investor Losses in the James E. Burton Jr Case

The pending FINRA arbitration suggests that Burton may have engaged in several forms of misconduct:

Misrepresentation and Omission

According to the complaint, Burton allegedly failed to make customers aware of the risks and facts associated with the Jazzberry Digital Solutions promissory notes. Under securities laws, brokers have a duty to fully disclose all material facts and risks of an investment.

Unauthorized Private Securities Transactions

Burton allegedly failed to disclose his activities related to these promissory notes to Farmers Financial Solutions, a direct violation of FINRA Rule 3280, which requires brokers to provide written notice to their firms before participating in any private securities transaction.

Undisclosed Outside Business Activities

FINRA Rule 3270 requires brokers to provide written notice to their firms of any business activity outside the scope of their relationship with the firm. The termination disclosure indicates Burton failed to properly disclose his activities related to the promissory notes.

Violation of Firm Policies

Beyond regulatory violations, Burton allegedly violated Farmers Financial Solutions’ internal policies regarding outside business activities and private securities transactions.

Legal Options for Recovering Investment Losses from James E. Burton Jr

If you invested in Jazzberry Digital Solutions promissory notes through James E. Burton Jr, you have several potential avenues for recovery:

1. FINRA Arbitration

The most common method for resolving investment disputes is through FINRA arbitration, which is typically faster and less expensive than court litigation. FINRA arbitration provides a forum where investors can seek recovery of losses caused by broker misconduct.

The current FINRA arbitration case against James E. Burton Jr (Case #23-02790) demonstrates this process in action. The case was filed on October 10, 2023, and remains pending as of March 2025.

2. Brokerage Firm Liability

Brokerage firms have a duty to supervise their brokers and may be held liable for failing to prevent selling away or other misconduct. In the James E. Burton Jr case, this could potentially involve:

• Farmers Financial Solutions, LLC (CRD# 103863) – where Burton worked when the alleged misconduct occurred

Even in selling away cases, brokerage firms may be held liable if they failed to adequately supervise their representatives or ignored red flags that should have alerted them to problematic behavior.

3. Regulatory Complaints

Filing complaints with FINRA, the SEC, or state securities regulators can initiate investigations that may lead to disciplinary actions against the broker and potential restitution for affected investors.

Understanding the FINRA Arbitration Process for Selling Away Disputes

If you’re considering filing a FINRA arbitration claim to recover losses from investments recommended by James E. Burton Jr, here’s what you can expect:

1. Initial Consultation with a Securities Attorney

A specialized investment fraud attorney will review your account statements, communications with your broker, and other relevant documents to assess whether you have a viable claim.

2. Statement of Claim Filing

Your attorney will prepare and file a Statement of Claim outlining the facts of your case, the alleged misconduct, and the damages sought. This document initiates the FINRA arbitration process.

3. Respondent’s Answer

The broker and brokerage firm will file an Answer responding to your allegations, typically denying wrongdoing and presenting their defenses.

4. Arbitrator Selection

FINRA will provide a list of potential arbitrators, and both sides will rank and strike names to select the arbitration panel that will hear the case.

5. Discovery Phase

Both parties exchange relevant documents and information. In selling away cases, this often includes subscription agreements, promissory notes, communications, and internal compliance records.

6. Arbitration Hearing

Similar to a simplified trial, the hearing allows both sides to present evidence, testimony, and arguments before the arbitration panel. Most hearings last 3-5 days depending on complexity.

7. Award Decision

The arbitrators will issue a binding decision, typically within 30 days of the hearing. If successful, you may recover some or all of your investment losses, plus interest and potentially costs.

Warning Signs That Should Have Alerted Investors to Potential Problems

Investors working with James E. Burton Jr or any financial advisor should be vigilant for these warning signs of potential selling away or other misconduct:

• Investments not listed on your brokerage account statements (a key indicator of selling away)
• Directions to make checks payable to individuals or entities other than the brokerage firm
• Promises of guaranteed returns or “risk-free” investments
• Significantly higher yields than comparable investments without explanation of additional risks
• Lack of official documentation from the broker’s firm regarding the investment
• Pressure to keep the investment “confidential” or not discuss it with others at the firm
• Requests to communicate about the investment through personal email or phone rather than official channels

Steps to Take If You Invested With James E. Burton Jr

If you invested in Jazzberry Digital Solutions promissory notes through James E. Burton Jr or were affected by other potentially improper recommendations, consider taking these immediate steps:

1. Gather all documentation related to your investments, including account statements, trade confirmations, correspondence, marketing materials, promissory notes, and notes from conversations
2. Do not communicate further with Burton about potential claims without legal representation
3. Consult with a securities attorney experienced in FINRA arbitration to evaluate your potential claims
4. Act promptly to preserve your legal rights, as statutes of limitation may limit the time you have to file a claim
5. Report concerns to FINRA or your state securities regulator if you believe misconduct occurred

Statute of Limitations for Investment Claims Against James E. Burton Jr

It’s crucial to act promptly if you believe you’ve been harmed by investments recommended by James E. Burton Jr. Most investment fraud claims are subject to various statutes of limitations:

• FINRA arbitration claims typically must be filed within 6 years of the event giving rise to the claim
• Federal securities law claims generally have a 1-2 year statute of limitations
• State securities law claims vary by state, typically ranging from 2-5 years
• Common law claims like breach of fiduciary duty vary by state, typically 3-6 years

Free Consultation for James E. Burton Jr Investors

Our investment fraud attorneys are currently investigating claims related to James E. Burton Jr and Jazzberry Digital Solutions promissory notes that resulted in losses. We offer:

• Free, confidential case evaluations with experienced securities attorneys
• No recovery, no fee representation – you pay nothing unless we recover money for you
• Experienced FINRA arbitration counsel with a track record of successful recoveries
• Comprehensive analysis of your investment losses and potential claims

Contact us today to discuss your potential claim against James E. Burton Jr and explore your options for recovering investment losses.

Related Investment Fraud Investigations

Investors who worked with James E. Burton Jr may also want to be aware of other potential investment concerns our firm is investigating:

• Other non-registered promissory notes with unrealistic returns or insufficient collateral
• Private placements marketed to retail investors without adequate disclosure
• Selling away schemes involving unauthorized investments
• Alternative investments marketed as providing both high yields and safety
• Ponzi schemes disguised as legitimate investment opportunities

Important Disclaimer

The information in this article regarding James Elroy Burton Jr (CRD# 5051310) is based on allegations made in a pending FINRA arbitration and information from public records. The claims against James E. Burton Jr have not been proven, and the presence of disclosures on BrokerCheck does not necessarily indicate wrongdoing.

All investors should conduct their own research and due diligence before making any investment decisions or legal choices. This article is for informational purposes only and does not constitute legal or investment advice.

Last Updated: March 7, 2025

Chetan Patil

Chetan Patil is the founder and Managing Partner of the Patil Law. He brings over 15 years of extensive experience in diverse complex disputes and transactions, across the country. Mr. Patil specializes in litigations, trials, arbitrations, and appeals of complex securities, FINRA, financial and business disputes, with an emphasis in securities, financial services, and financial regulatory law.