The Financial Industry Regulatory Authority has suspended broker Jon Herbert Green of Escondido, California for allegedly obtaining and failing to repay in full an eight-year-old loan from what FINRA deems an "elderly and unsophisticated customer."
According to FINRA, in November 2004, Green secured a $6,000 loan from an 88-year-old client of his, promising to repay the loan within six months, or by mid-2005. The findings further state that Green did not inform nor receive authorization from his firm, Signature, which is a violation of NASD Rule 2370.
The investigation revealed that instead of timely repaying his elderly customer in full, Green allegedly made 27 partial payments during a lengthy period that began in late 2004 and continued into 2012. FINRA found that Green is still $2,250 short of repaying principal.
After leaving Signature, Green became associated with Foresters Equity Services, Inc., where he was terminated for allegedly taking another loan from a customer in violation of Foresters' firm policy.
In connection with this action, Green submitted a Statement of Corrective Action in which he stated, "As noted in the AWC over 8 years ago, I did borrow moneys from 2 different former clients. Since 2005 I have not nor will I ever do this again." Green also stated his intent to repay his now-96-year-old client "or her heirs" the remainder of the $2,200-plus balance.
Before engaging in private loans with a broker or representative, it is important to understand the employing firm's policies in regards to these activities: whether and what types of loans are authorized, whether the firm offers any protections or guarantees, etc. Engaging in transactions "off the books" or outside of the firm's scope can be risky, as the above case demonstrates.
If you have engaged in personal lending with a broker, representative or financial advisor, and such activity has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.