Representative Settles FINRA Charges for Unauthorized Sharing in Customers' Losses

A registered representative settled FINRA charges for (i) sharing in his customers' losses and (ii) making an unauthorized loan to a customer.

In a Letter of Acceptance, Waiver and Consent ("AWC"), FINRA stated that between July 2010 and February 2020, the representative made 990 payments totaling $249,560 to nine firm customers. FINRA found that these payments were (i) made to compensate the firm's customers for their losses resulting from the representative's investment recommendations and (ii) done without firm authorization. In addition, FINRA found that the representative made an unapproved loan of $10,000 to a customer without firm authorization.

FINRA found that the representative violated FINRA Rules 2150(c) ("Improper Use of Customers' Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts"), 3240 ("Borrowing From or Lending to Customers") and 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the representative agreed to a three-month suspension from associating with any FINRA member and a $10,000 fine.