James E. "Jeb" Bashaw, a former star broker with LPL Financial, was suspended for four months by the Financial Industry Regulatory Authority Inc. on Tuesday for borrowing $200,000 from a customer in 2013 without telling LPL, a violation of industry rules.
LPL
fired Mr. Bashaw in 2014 for allegedly failing to follow firm policies and industry regulations. He "falsely told LPL that he had not borrowed any money from another individual" in two annual compliance questionnaires before he was fired, according to Finra.
Mr. Bashaw did not repay the customer loans,
according to the Finra order. When he filed a Chapter 11 bankruptcy petition in December 2017, he disclosed the debt as a personal loan, and it was included in a reorganization plan approved by the bankruptcy court in May 2018, according to Finra.
Mr. Bashaw, who neither admitted or denied Finra's findings, was ordered to pay a $5,000 fine and requalify to sell securities by taking the Series 7 exam, a basic test required to sell stocks and bonds.
Mr. Bashaw eventually became registered with International Assets Advisory, an Orlando, Fla.-based independent broker-dealer.
In an email Wednesday afternoon, Mr. Bashaw said he was traveling and was not available to comment.
Before he was fired, Mr. Bashaw was a star broker for LPL in Houston. In 2011, Barron's magazine ranked him the top financial adviser in Texas, with total assets of $3.8 billion. Industry sources at the time said he had a total of about two dozen advisers working under him in various offices.
Mr. Bashaw fought back against his old firm. In 2016, he
filed a $30 million arbitration claim with Finra against LPL and its former CEO, Mark Casady, alleging that the firm stole his clients in the wake of a rigged audit of his branch office in September 2014 that led to his being fired.
In October 2017, a Finra arbitration panel
ruled against Mr. Bashaw, but ordered LPL to pay Mr. Bashaw $25,000 in legal fees because the company failed to produce documents as ordered or show good cause for not producing the documents.
