The answer is usually no. Borrowing money from clients is usually considered a violation of the securities industry rules and regulations. Despite the seriousness of this rule, brokers regularly borrow funds from clients. In some instances, when brokers get caught borrowing funds, they get terminated from their firm or even kicked out of the securities industry.
Consider the case of Patrick Joseph Friel. The former Saxon Securities and TFS Securities broker recently consented to FINRA sanctions and to the entry of findings that he improperly borrowed money from a customer at his member firm. The loan was interest free and did not have any terms of repayment. The findings stated that the firm’s procedures generally prohibited borrowing money from a customer, except in limited circumstances. He was then suspended from the securities industry for 30 days. In some instances, “borrowed” funds by a financial advisor can be recovered against the brokerage firm. To learn how, please call our law firm in Chicago, Illinois.
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