Advisor Alert: Our Attorneys Are Investigating John Bailey For Investment Fraud

Last Updated: November 2024 (Brentwood, Tennessee)

National securities fraud lawyers at Patil Law P.C. are investigating broker John Bailey III (CRD #5708044), founder of Bailey & Co. Securities, LLC, regarding an active FINRA investigation into alleged undisclosed private securities transactions.

Critical Insights About Brentwood, TN Investment Banker John Bailey

• Advisor Name: John James Bailey III
• CRD: 5708044
• Location: Brentwood, TN
• Current Employer: Bailey & Co. Securities, LLC
• Classification: Investment Banker
• Principal Primary Location: Brentwood, TN
• Can John Bailey be sued in FINRA arbitration: Yes
• Current Investigation: FINRA Wells Notice regarding private securities transactions
• Registration Status: Currently registered in three states

Details of Current FINRA Investigation

Wells Notice (October 2024)

FINRA has issued a Wells Notice indicating their preliminary determination to recommend disciplinary action for:

• Violations of FINRA Rule 3280 (Private Securities Transactions)
• Violations of FINRA Rule 2010 (Standards of Commercial Honor)
• Failure to properly disclose private securities transactions
• Pending determination of sanctions

Analysis of Alleged Violations

Private Securities Transaction Violations

The investigation centers on potential violations of fundamental FINRA requirements:

FINRA Rule 3280 Implications:

• Failure to provide written notice to firm
• Non-disclosure of private securities activities
• Potential “selling away” violations
• Circumvention of firm supervision

Commercial Honor Standards

The investigation also implicates FINRA Rule 2010 violations through:

• Breach of ethical standards
• Failure to maintain transparency
• Non-compliance with disclosure requirements

Regulatory Framework and Investor Protection

FINRA Rule 3280 (Private Securities Transactions)

This fundamental rule, often called the “selling away” rule, requires registered persons to provide written notice to their firm before participating in any private securities transaction. The rule exists to prevent brokers from circumventing firm supervision and conducting securities business outside proper channels. It requires detailed disclosure of the proposed transaction, the broker’s role, and whether compensation will be received. This oversight is crucial for protecting investors from unvetted investments and ensuring all securities activities are properly supervised.

FINRA Rule 2010 (Standards of Commercial Honor)

This broad ethical rule requires brokers to observe high standards of commercial honor and just and equitable principles of trade. The rule serves as a catchall provision that holds industry members to high ethical standards beyond mere technical compliance with specific rules. It requires brokers to deal honestly and fairly with customers and maintain the integrity of securities markets through ethical business practices.

Investment Banking Private Placement Rules

FINRA Rule 5122 and 5123 establish specific requirements for private placements, including:

• Filing requirements for private placement memoranda
• Disclosure obligations regarding use of proceeds
• Limitations on participation by associated persons
• Requirements for retail investor participation

These rules work together to create a comprehensive framework protecting investors in private securities transactions by ensuring proper disclosure, supervision, and compliance with securities laws.

Investment Banking Background

Bailey’s career includes significant investment banking experience:

• Bailey & Co. Securities, LLC (2019-Present)
• Stillpoint Capital, LLC (2014-2020)
• Burch & Company, Inc. (2009-2012)

Professional Qualifications:

• Series 24 (General Securities Principal)
• Series 79 (Investment Banking Representative)
• Series 62 (Corporate Securities Representative)
• Series 63 (Uniform Securities Agent)

Red Flags for Investors

1. Active FINRA Investigation – Wells Notice indicates serious regulatory concerns
2. Private Securities Activity – Investigation suggests undisclosed transactions
3. Potential Supervision Issues – Questions about oversight of securities activities
4. Recent Firm Formation – Bailey & Co. Securities established relatively recently

Implications for Investors

The current investigation raises concerns about:

• Proper disclosure of investment opportunities
• Regulatory compliance in securities transactions
• Supervision of investment activities
• Protection of investor interests

Patil Law P.C. Will Help You Recover Your Investment Losses

If you have conducted securities transactions with John Bailey or Bailey & Co. Securities, contact Attorney Patil online or call (800) 950-6553 for a free consultation to discuss your legal rights. Cases handled on contingency – no recovery, no fee.

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.