From September 2016 through August 2018, Steven Melen accepted four loans from two customers totaling $307,000 without disclosing them to his firm. As a result, Melen violated FINRA Rules 3240 and 2010. Melen also failed to disclose his ownership of a rental property to his firm in violation of FINRA Rules 3270 and 2010.
In September 2016, while undergoing medical treatments, Melen borrowed $150,000 from a friend and brokerage customer, who was 87 years old at the time. The loan was interest-free and not memorialized in writing. Melen repaid the loan in full in January 2017. In September 20, 2017, Melen borrowed an additional $110,000 from the same customer. Again, the loan was not memorialized but this time Melen agreed to pay interest. Melen repaid the loan with interest in January 2018In January 2018, Melen also borrowed $25,000 from a second customer of his, with whom he had a close personal relationship. This loan was not memorialized in writing, but Melen agreed to pay interest. Melen made partial repayments in April and May 2018. In August 2018, Melen borrowed an additional $22,000 from the same customer. The loan was not memorialized in a writing, but Melen agreed to pay interest. In August 2018, Melen repaid the second loan with interest plus the balance due on the first loanNeither customer complained.. . .In October 2013, Melen purchased beach-front property in Panama, originally as avacation property, and then a year later he later decided to rent it out for income. Melen employed a property-management company to handle ongoing maintenance and rentals. From October 2013 to April 2019, Melen received approximately $200,000 in compensation from the property.Melen did not disclose the Panama rental property to Morgan Stanley in writing. He also failed to identify it on his annual attestations and, in 2017, affirmatively stated to the firm that he did not participate in any outside business activities that required disclosure. Melen did disclose the outside business activity to his current member firm.