Robert E. Heath, from Colorado Springs, Colorado, a registered representative with AXA Advisors, LLC, was fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he engaged in the unauthorized borrowing of customer funds. Letter of Acceptance, Waiver and Consent, No. 2015046946301 (Aug. 12, 2016).
According to the AWC, on July 20, 2012, at a time when Heath was registered with AXA Advisors, he received $7,500.00 in funds from a customer, ES, through a borrowing arrangement. Apparently, the arrangement, which was undocumented, called for ES to receive monthly payments and six percent interest until repayment, with no maturity date fixed for the loan.
The AWC stated that the principal repayment for the loan was never made by Heath; he merely made one August 2012 payment of interest to ES. The AWC further indicated that the firm’s rules did not allow representatives such as Heath to engage in borrowing arrangements with firm clients, regardless of the circumstances. FINRA found that Heath’s conduct in this regard was violative of FINRA Rules 3240 and 2010.
Public disclosure records reveal that on August 13 ,2015, Heath was terminated by Presidential Brokerage, Inc., who Heath worked for after his termination from AXA Advisors in 2012. Presidential Brokerage Inc. stated that the basis of Heath’s termination was due to receiving a customer request for Heath to repay funds associated with an outside investment which Heath had solicited from the customer.
The customer’s $7,500.00, according to the allegations from Presidential, were apparently placed into a corporate account under Heath’s control, where the funds were ultimately transferred to Heath’s personal bank. Presidential claimed that Heath’s conduct was indicative of the conversion of the customer’s funds.
Public disclosure records additionally reveal that on October 28, 2009, Heath settled a customer dispute for $7,878.00 amid allegations that the customer’s transfer requests were not fulfilled by Heath after being submitted to him.
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