A former Morgan Stanley broker has been barred from association with any Finra-regulated broker-dealer following receipt of two unauthorized loans from clients worth several hundred thousand dollars, according to a Finra enforcement notice filed Sept. 30.
The broker, Jeffrey Hunter Smith, borrowed $300,000 from two clients — $150,000 from each — in December 2011 and August 2012, respectively, without first receiving prior written approval to enter into the loans from Morgan Stanley, according to a letter of acceptance, waiver and consent filed by the Financial Industry Regulatory Authority Inc.
Mr. Smith was registered with Morgan Stanley from 2009 to 2015, according to his Finra BrokerCheck report. He was most recently registered with Wells Fargo Advisors, until June of this year.
Morgan Stanley's written supervisory procedures prohibited brokers from entering into a borrowing arrangement with a firm client unless the client was an immediate family member, and the broker provided written notice of the arrangement prior to entering into the loan.
Neither client was a member of Mr. Smith's immediate family.
In addition to not disclosing the loans in subsequent annual sales questionnaires, Mr. Smith falsely attested he had not borrowed money from firm clients, according to the Finra document.
In violation of Finra rules, Mr. Smith, through his counsel, informed the broker-dealer watchdog that he would not be furnishing requested documents, such as personal bank account statements, as part of an investigation into his conduct.
Mr. Smith allegedly also failed to disclose a creditor compromise in a timely manner, according to Finra.
Mr. Smith's counsel, Henry Willett III of Christian & Barton, didn't immediately respond to a request for comment.
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
Streamline your outreach with Aidentified's AI-driven solutions
This season’s market volatility: Positioning for rate relief, income growth and the AI rebound
