Here's a short BrokeAndBroker.com Blog about a stockbroker who was juggling a brokerage business, an insurance business, and the obligation to repay a customer for a six-figure loan. Sometimes ya just can't keep all the balls in the air.
Case In Point
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, Charles H. Clark, Jr. submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Charles H. Clark, Jr., Respondent (AWC #20015044377401, July, 16, 2015).
Clark entered the industry in 2007 and was registered with LPL Financial LLC from October 2009 until February 2015.
The AWC asserts that Clark and another registered representative were conducting a securities business at LPL and offering insurance products through a fully-disclosed outside business entity.
In December 2010, Clark and the other rep allegedly borrowed $100,000 from one of their LPL customers in order to fund the outside entity (pursuant to a promissory note calling for 8% annual interest). In December 2014, the lending customer purportedly filed a complaint with LPL asserting failure to timely repay the loan.
According to online FINRA BrokerCheck records as of July 27, 2015, LPL "Discharged" Clark on January 28, 2015, based upon allegations of:
BORROWING MONEY FROM A CLIENT IN VIOLATION OF FIRM POLICY
In accordance with the terms of the AWC, FINRA imposed upon Clark a $5,000 fine and a three-month suspension from association with any FINRA member firm in all capacities.
READ a detailed analysis of FINRA Rule 3240: Borrowing From or Lending to Customers by veteran regulatory lawyer Bill Singer