The Financial Industry Regulatory Authority Inc. on Thursday suspended a former J.P. Morgan Securities financial adviser for two months after he allegedly broke industry rules when he made "negligent misrepresentations" in a loan application for federal Covid relief.
The adviser, Tameem Habib, was also fined $2,500, according to the Finra settlement. Habib has 5 years experience in the securities industry and was registered with J.P. Morgan Securities in Tarzana, California, from 2019 to 2020. Habib neither admitted to or denied Finra's findings in the matter, according to the settlement.
Habib could not be reached by phone Friday to comment.
In 2020, the federal government initiated several programs to assist small businesses adversely affected by the Covid-19 pandemic, including the Economic Injury Disaster Loan program, which was administered by the Small Business Administration.
In January 2021, Finra told InvestmentNews it was probing registered representatives who obtained coronavirus-relief loans for possible violations related to work they do outside their brokerage firms. Since then, Finra has penalized several registered reps for incorrectly or inappropriately applying to federal loan programs for small businesses feeling economic pressure as a result of the Covid-19 pandemic.
"In or about March 2020, while a registered representative of J.P. Morgan, Habib applied to the SBA for an Economic Injury Disaster Loan on behalf of a car service business he intended to operate as a sole proprietorship," according to Finra. "Habib failed to carefully review the loan application before submitting it to the SBA."
On the application, Habib "negligently misrepresented" that the business had earned revenue between January 2019 and January 2020, when in fact it had not, according to Finra. He then received $1,000 in April 2020 but failed to get approval from J.P. Morgan Securities to have an outside business before securing the loan. Brokers need to get approval from their firms for any so-called outside business activities.
Habib has yet to pay back the $1,000 to the SBA, according to Finra.
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