Rhodes failed to give notice to his member firm as required by the firm and FINRA rules that he was engaged in an outside business activity and was being compensated by an individual for providing financial services. The individual contacted Rhodes for financial advice on several businesses the individual owned and on a number of issues and Rhodes met with his firm’s officers to develop a plan for working with the individual.
Rhodes firm’s officers told him that he had to qualify and become registered as an investment adviser representative (Series 65) before he could provide the services the individual requested and be compensated for those services. Rhodes was paid $25,000 per month from one of the individual’s businesses even though he was not registered as an investment adviser representative. The Firm learned about the compensation through other means.