Former LPL Broker Fined And Suspended For Outside Brokerage Accounts

June 4, 2012

English: A typical Deutsche Bahn railway stati...

When FINRA says prompt notification, they don't mean take your time.

For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Masaharu B. Hoashi submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Masaharu B. Hoashi, Respondent(AWC 20100222455-01, May 29, 2012).

Hoashi entered the securities industry in July 1994 as a General Securities Representative, and during the relevant time of February 2008 through March 17, 2010, Hoashi was registered with LPL Financial LLC .  The AWC asserts that he had no prior disciplinary history. 

Signed, Sealed, and Delivered

On or about August 12, 2008, without the prior authorization or consent of either customer, Hoashi instructed his assistant to affix the signatures of a husband and wife onto an account transfer form. Hoashi subsequently submitted the form to LPL for processing.  FINRA viewed such acts as violations of NASD Rule 2110.

And Away We Go

Upon joining LPL, Hoashi had maintained a securities account at Firm #2,  another FINRA member; and he was required to promptly provide written notice to both firms about the outside account and his status as an associated person with LPL. However, Hoashi never notified Firm #2 of his association with LPL; and did not notify LPL about the away account at Firm #2 until October 1, 2008, when he transferred the assets in the away account to LPL.  While still associated with LPL in June 2009, Hoashi opened two new accounts at Firm #3 but failed to promptly provide either LPL or Firm#3 with the required written notice - only notifying LPL about these away accounts on September 24, 2009.  The AWC alleged that Hoashi failed and untimely notices constituted violations of NASD Rules 3050 and 2110, and FINRA Rule 2010, as were applicable.

According to the terms of the AWC, FINRA imposed upon Hoashi a $10,000 fine and a two-month suspension from association with all FINRA members in all capacities.