FINRA's Rudy Mejia Jr. Case: Private Fund, No Notice

Updated October 2026. First published December 2024. The first version named the wrong firm and got the amounts and the suspension wrong; this version follows FINRA's order.

On November 11, 2024, FINRA accepted a Letter of Acceptance, Waiver, and Consent from Rudy R. Mejia Jr., a former general securities representative at Estrada Hinojosa & Company (AWC No. 2023079264201). He agreed to an eight-month suspension from associating with any FINRA member in any capacity and a $10,000 fine, without admitting or denying the findings.

FINRA found two violations. He took part in private securities transactions without written notice to his firm, which broke FINRA Rules 3280 and 2010. And he opened two outside brokerage accounts without his firm's consent, which broke Rules 3210 and 2010. Neither finding is unusual. What makes the order useful is how plainly it lays out each step a firm's controls are supposed to see.

What the Order Says He Did

In September 2022, Mejia and a friend set up a pooled investment fund that traded options, plus a management company to be the fund's general partner. Mejia put in $100,000 of his own money. Between November 2022 and July 9, 2023, seven other investors bought $738,000 of the fund's limited partnership interests. All seven were friends or family of Mejia or his co-founder. None were customers of Estrada Hinojosa.

For three of the investors, he introduced the fund, gave them information about it, had the fund's lawyer send them the offering documents, and in two cases countersigned the subscription agreement for the fund. For the other four, he reviewed their subscription agreements and countersigned them. He expected to be paid through the quarterly performance fees the fund paid to the general partner he co-founded. He received those fees after he left the firm.

He gave Estrada Hinojosa no written notice of any of it, including his own investment, and the firm never approved it.

The accounts came first. In September 2022, the fund and the general partner each opened a brokerage account at another member firm. Mejia controlled both and had a beneficial interest in both. He placed 304 trades in them while he was still registered with Estrada Hinojosa. He didn't get the firm's written consent, and he didn't tell the executing firm where he worked.

How It Came to Light

Mejia resigned on June 9, 2023. Estrada Hinojosa filed his Form U5 on July 9, 2023. The U5 disclosed that he had been under internal review for forming a municipal advisory firm and for managing a pooled fund he hadn't disclosed. FINRA's case started from that U5.

The order doesn't charge Estrada Hinojosa with anything, and it doesn't say when the firm's review began. It does show how long the activity ran without the notice and consent the rules require: the outside accounts were trading from September 2022, and the fund was selling interests from November 2022.

Why Friends, Family, and No Firm Customers Didn't Help

Rule 3280 doesn't ask whose customers the investors are. A private securities transaction is any securities transaction outside the regular course or scope of the person's employment with the firm. The rule's only family carve-out covers transactions among immediate family members where no associated person receives selling compensation, and Mejia expected performance fees.

Those fees are the second point. The rule defines selling compensation as any compensation paid directly or indirectly, from whatever source, in connection with the purchase or sale of a security. A performance fee paid by the fund to a general partner he co-owned counts. Because he expected compensation, Rule 3280(c) would have required the firm, once notified, to approve or disapprove his role in writing. Had it approved, it would have had to record the sales on its books and supervise his part in them as if the firm had executed the trades.

Rule 3210 reads the same way. It covers any account at another firm that can trade securities and in which the associated person has a beneficial interest. Accounts in the names of the fund and its general partner were his accounts under the rule, because he controlled them and had a beneficial interest in them.

What to Check in Your Own Process

Read the order as a test of your own controls. These are the questions it raises:

Does your annual outside-activity questionnaire ask about roles in entities: general partner, managing member, co-founder, investment manager? Mejia's pay ran through a general partner, not a paycheck.
Does your Rule 3210 attestation ask about accounts held in the name of an entity the person controls? Both of Mejia's outside accounts were in entity names.
Does your Rule 3280 notice form capture the representative's own investment in a deal they're helping sell? The order lists his $100,000 purchase next to the sales.
When someone forms a fund, an advisory firm, or any company with an investment purpose, does compliance hear about it before the first investor signs? The U5 named both of Mejia's ventures.
At exit, do you ask the outside-activity and outside-account questions again, in writing? That's where this case surfaced.

Rule 3290 Will Replace Rules 3270 and 3280

On September 15, 2026, the SEC approved FINRA Rule 3290 (Outside Activities Requirements), which replaces Rules 3270 and 3280 (Release No. 34-106381). FINRA will announce the effective date in a Regulatory Notice. Until it takes effect, Rules 3270 and 3280 still apply.

The new rule narrows the outside activities registered persons must report to investment-related ones. For what it calls outside securities transactions, the core of Rule 3280 stays. The person gives prior written notice. If the transaction involves selling compensation, the firm assesses it and decides in writing to approve, approve with conditions, or disapprove. An approved transaction is recorded on the firm's books and supervised as if the firm executed it, and if the firm sets conditions, it has to supervise them. Transactions covered by Rule 3210 stay outside it, as they are under Rule 3280 today.

On Mejia's facts, Rule 3290 asks for the same two things Rule 3280 does: notice before the first sale and the firm's written decision. If you're rewriting your outside-activity procedures for the new rule, keep the questions about entities and entity accounts.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.