Three brokers with major firms were penalized last month by Finra for incorrectly or inappropriately applying to federal loan programs for small businesses feeling economic pressure due to the Covid-19 pandemic.
The Financial Industry Regulatory Authority Inc. in January told InvestmentNews it was probing registered representatives who obtained coronavirus-relief loans for possible violations related to work they do outside their brokerage firms.
Finra's efforts appear to have ratcheted up recently; the three brokers, Gloria Willis, Evelyn Batista and Kenric Sexton, are no longer registered salespeople and have either been suspended or barred from the securities industry.
As is customary with such settlements, none of the three former brokers in question admitted to or denied the findings of the investigations in the process of the settlement. And none could be reached Monday for comment.
But according to Finra documents and profiles of the brokers on BrokerCheck, each of the industry rule violations was linked to applications for government loans from the Small Business Administration.
Willis, a broker from 2014 to last December with J.P. Morgan Securities, was barred from the securities industry, according to the Finra settlement, for refusing to testify in Finra's investigation of her resignation from the firm. J.P. Morgan Securities was reviewing Willis "to assess whether she had a valid and appropriate reason for obtaining ... a Small Business Administration grant," according to Finra.
Batista, who had been a broker for less than a year with Merrill Lynch, was suspended by Finra last Thursday for seven months when it came to light that "she made reckless misrepresentations in a loan application and loan agreement she submitted to the Small Business Administration to obtain an economic injury disaster loan," according to Finra.
"In the application, Batista recklessly misrepresented that she was the owner of a property management real estate business, that the business earned $35,000, and that the business lost $15,000 in rental income due to the pandemic," according to Finra. "Batista had not disclosed outside business activities with her member firm, did not own any such property management real estate business or have any other business eligible for this type of loan from the SBA."
Sexton, a former Wells Fargo broker, was suspended for a month and fined $2,500 on July 21.
"Sexton did not operate any business eligible for a small business loan from the SBA," according to Finra. "Instead, Sexton was seeking the loan to fund his self-directed online trading account."
A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.
Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.
Some in the industry say that more UBS financial advisors this year will be heading for the exits.
The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.
Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
