Starship Enterprise, Lone Ranger, Tonto, Silver, Pumpkin Spice Latte, And FINRA Settlement

September 18, 2017

I often say that if it wasn't for stupidity, I would have nothing to do as a lawyer. Thankfully, there's more than enough stupidity to go around to fully employ me and millions of other lawyers. In a recent FINRA regulatory settlement, we have a case in which not only does a registered rep borrow money from two elderly clients but he also fails to apply the loans as promised and, duh, doesn't repay the debt. 

Frankly, that should be enough misconduct for anyone. Not for our intrepid Respondent. He seems to be a Trekkie who is determined to boldly go where no man has gone before. In the end, however, this voyage is more pathetic than inspiring and comes off as a fairly sad journey.

All of which has me wondering why the Star Trek television series seemed so wonderful when I was a teenager in the mid-Sixties but now looks somewhat cheesy with a bunch of guys running around in costumes that look like what my dentist wore and, oh my god, did they really dress the women cast members up in those bar-maid-like outfits? Of course, as a teenager in the Sixties I wasn't exactly unhappy with the mini-skirts. More to the point, c'mon, you can't say nuthin' bad about Shatner or Nimoy or the Enterprise. Them thar's fightin' words!  One thing I never quite got, though, was when the Enterprise was only seconds from a neutron implosion because Captain Kirk had ordered Scotty to go to Warp 11 but Scotty said the old girl can only take Warp 8 even though we all knew that it was built for Warp 10 and then with all the lights flashing red and the computer counting down to self-destruction, Spock crawls on the floor, pulls out a metal panel under the command station, and rips out two wires in this multi-trillion-dollar warp-speed space ship and hot wires NCC-1701 and saves the day. At some point, after Spock has pulled out the same metal panel and the same two wires during an increasing number of self-destruct countdowns, you'd sort of figure that maybe Kirk would have figured out that the next time they go through the same meltdown that they should like not replace the screws on the panel and leave the thing on the floor and just touch the same two wires together and shut down the space-warp drive engine. Like, what?, there aren't lots of Klingons and Romulans out there just waiting to mess with the Enterprise? And, on top of that, why the hell would you push a Warp 10 engine to Warp 11 after the damn ship has nearly exploded every time you try that? Like the extra few minutes it will take to catch up the the cloaked enemy ship is going to be a big deal when you're floating around space charting the unknown? 

Which reminds me of all those episodes where the bad guys robbed the bank and about twenty minutes later the Lone Ranger shows up and then gallops out of town with Tonto to chase the guys who have, by now, at least a half hour jump on them. If it were me, I would have gone over to the local Starbucks, had a Pumpkin Spice Latte, maybe a muffin or, depending on whether there's a Dunkin' Donuts in town, maybe go to that place and get a box of donuts, especially if I have one of those discount coupons I've been saving, and, then, before jumping on the horse,  find a clean bathroom and empty my bladder before getting on Silver's aching back, and then, mosey on after the bad guys at a nice walk or gentle trot  because the damn horse has to be getting sick and tired of being run into the ground when you're chasing a gang that's got such a lead on you that you can't even see them on a landscape with no hills or mountains and just a few rolling tumbleweeds and an occasional cactus. You wanna give that Hi Ho Silver thing a rest? Where the hell are we running to this time? Of course, all along, Tonto is complaining that he wants to stop by a nearby casino and say hi to some family and the Lone Ranger is saying no. It's gotten to the point where Tonto hired a lawyer to explore a spin-off series of his own. Silver is just looking forward to retiring to some stud farm. 

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, William Roy Kimberlin submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of William Roy Kimberlin, Respondent (AWC 2016049233701, August 31, 2017). 

Kimberlin was first registered in 1992 with FINRA member firm MetLife Securities, Inc., where he remained until his February 2016 termination. During his registration with MetLife Securities, he was also employed by the affiliated Metropolitan Life Insurance Company. The AWC asserts that "Kimberlin has no prior disciplinary history in the securities industry."

October 2013 Customer Loans

The AWC asserts that since September 2013, MetLife's written policies prohibited its representatives from borrowing money or securities from a client without exception  for clients who were also family members or personal friends of the firm's representatives.  

Customer SW 

The AWC alleges that in October 2013, Kimberlin solicited a $20,000 loan from an individual who is described as a 71-year-old MetLife Securities customer "unsophisticated in financial matters." The AWC references this customer as "Customer SW." The alleged purpose of the loan was to finance a real estate investment business that Kimberlin had purportedly started.

Customer SW allegedly wrote a $20,000 check to Kimberlin, and the Respondent is described as having:

assisted Customer SW in arranging an early withdrawal from her annuity policy, causing her to incur surrender charges and tax penalties totaling approximately $4,400. Customer SW wrote a check to Respondent in the amount of $20,000. To document the $20,000 loan, Respondent provided Customer SW with a loan document dated October 21, 2013 that he signed calling for the loan to be repaid over 24 months and for the payment of interest at rates ranging from 20% to 5% depending on how long the loan was outstanding. 

Customer VI 

The AWC alleges that in October 2013, Kimberlin solicited a $10,000 loan from an individual who is described as a 76-year-old MetLife Securities customer  The AWC references this customer as "Customer VI." The alleged purpose of the loan was to finance a real estate investment business that Kimberlin had purportedly started.

Customer VI wrote a $10,000 check to Kimberlin.. The loan was memorialized in a document executed by Kimberlin, his wife, and Customer VI, and dated October 21, 2013, which set forth repayment in six months at 20% interest.

Misuse of Loans

The AWC asserts that Kimberlin misused the $30,000 in loans from Customers SW and VI to pay down the balance on his credit cards and did not repay said loans. 


The AWC asserts that from 2013 through 2016, MetLife Securities required its registered representatives to complete Annual Certifications, which, in pertinent part, required certification of the reps' understanding of certain prohibited practices and an agreement that they had not and would not engage in those practices. 

The AWC alleges that one day after soliciting and accepting the $30,000 in customer loans described above, on October 22, 2013, Kimberlin falsely certified on the 2013 Annual Certification that he had not and would not engage in the prohibited practice of borrowing money or securities from a client. Thereafter, the AWC alleges that Kimberlin falsely certified the same compliance on his 2014 and 2015 Annual Certifications. 

Outside Business Activity 


The AWC alleges that sometime around November 2013, Kimberlin established the "Kimberlin N Vest RS LLC," for which he was a Director and Manager and the entity purportedly remains active. The AWC alleges that Kimberlin listed the LLC on his 2013 and 2014 Schedule C of his IRS Form 1040 and reported losses for 2013: $24,096, and 2014: $16,910. Kimberlin's conduct with the above LLC is characterized by the AWC as involving an "outside business activity" ("OBA") and, he allegedly failed to properly disclose to his firm said OBA from its inception in 2013 through February 2016. 

Sports Officiating 

The AWC also asserts that Kimberlin:

participated in a business involving sports officiating since 1969 and continues to participate in those activities to date. He failed to disclose his participation in this outside business activity when he first joined the Firm in 1992 or at any time prior to August 2008. Respondent listed his sports officiating activities on a Schedule C filed with his IRS Form 1040 since at least 2013 through 2016. The sports officiating-related Schedule C Forms filed by Respondent during this three-year period reported profits ranging from approximately $1,300 to $1,800. . .


Online FINRA BrokerCheck records as of September 18, 2017, disclose that MetLife had "discharged" Kimberlin on February 24, 2016, based upon allegations that:

The registered representative did not follow firm policy with respect to loans from customers. 


FINRA deemed that Kimberlin's: 

  • solicitation and acceptance of $30,000 in loans from two customers violated his firm's procedures and constituted further violations of FINRA Rule 3240 and 2010;
  • misrepresentations about borrowing from customers on his 2013, 2014 and 2015 Annual Certification in violation of FINRA Rule 2010; and
  • failure to disclose to his firm his OBAs involving real estate investing and sports officiating constituted violations of FINRA Rules 3270 and 2010 (from November 2013 through February 2016) and NASD Rules 3030 (from February 1992 through August 2008) and FINRA Rule 2110 (from at least July 1996 through August 2008). 

In accordance with the terms of the AWC, FINRA imposed upon Kimerlin a $15,000 fine and an 18 month suspension from association with any FINRA member broker-dealer in any capacity.

Bill Singer's Comment

I sincerely want to compliment FINRA for issuing a comprehensive AWC that offers excellent content and context. I can't ask for more or less. Spot on!  Nice job!!

That being said (sigh), I do need to make one criticism. Y'all really, really, really needed to include that somewhat idiotic and pathetic charge of Kimberlin having engaged in sports officiating for which he was paid less than $2,000 for three years of work? Seriously? Wasn't that a bit like hitting your opponent when he's down and after the ref called the fight because you had beaten the guy to the point where he didn't know the day of the week or his own name? 

VISIT the Blog "Borrowing" Archive

PDF Copy of Bill Singer, Esq.'s Borrowing Rule Analysis

VISIT the Blog "OBA" Cases Archive

PDF Copy of Bill Singer, Esq.'s OBA Rule Analysis