Jeffrey C. Borneman, of Lancaster, Kentucky, a stockbroker with Cambridge Investment Research, was fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he engaged in an unauthorized private securities transaction. Letter of Acceptance, Waiver and Consent, No. 2015044368901 (Apr. 22, 2016).
According to the AWC, in January 2014, Borneman formed, and became the owner and operator of an LLC, which was designed to make public the LLC’s analysis of the industry and market. Apparently, Cambridge Investment Research had authorized Borneman’s LLC, considering it to be an outside business activity.
The AWC stated that in March 2014, Borneman prompted the sale of a stake in the LLC to one of Cambridge’s customers. Specifically, in return for $15,000.00, the Cambridge customer was granted stock in the LLC. Borneman apparently did not seek out Cambridge for the requisite written approval prior to engaging in the transaction with the customer.
Apparently, the firm permitted Borneman to resign on January 6, 2015, in connection with the incident. Cambridge alleged that the firm would not have participated in the transaction if it became apprised of such. Consequently, FINRA found Borneman to be in violation of FINRA Rule 2010 as well as NASD Rule 3040.
Public disclosure records reveal that Borneman has been subject to six disclosure incidents, which include two customer disputes. On March 8, 2002, Borneman settled a customer dispute for $37,500.00 after a customer alleged that Borneman made unauthorized trades in the customer’s account. Shortly after, on March 20, 2002, UBS Painewebber Inc. terminated Borneman for his misconduct.
On July 29, 2002, Borneman settled a customer dispute for $7,469.87 amid allegations that Borneman misrepresented guarantees regarding an annuity. The client was reportedly advised by Borneman that the annuity purchased would guarantee a seven percent annual return, when such was not the case. The customer also alleged that Borneman engaged in unauthorized trading.
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