James Edward Bashaw of Houston Texas a stockbroker formerly employed by LPL Financial LLC has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Bashaw engaged in impermissible customer loan arrangements while associated with LPL Financial. Letter of Acceptance Waiver and Consent No. 2014042876501 (Apr. 23, 2019).
According to the AWC, during the time that Bashaw was associated with LPL Financial, a total of $200,00.00 had been loaned to him by a customer of the firm whose accounts Bashaw had been responsible for servicing. Evidently, the $200,000.00 in loans were not repaid by Bashaw. Supposedly, a bankruptcy petition had been filed by Bashaw in December of 2017 in which he classified the customer’s loan as a personal loan. Evidently, the loan repayment terms were restructured through the bankruptcy, causing the customer to have to wait to be repaid (if the customer will be repaid at all).
The AWC stated that Bashaw’s receipt of a customer loan had not reported by him to LPL Financial even though he was required under the firm’s policies to seek permission from the firm before borrowing customer funds. Moreover, Bashaw had been administered compliance questionnaires between July of 2013 and July of 2014. Supposedly, Bashaw made false statements to the firm in those questionnaires about the loans. Apparently, Bashaw led the firm to believe that he never borrowed from any of its customers. FINRA found Bashaw’s unapproved customer loan and false representations about the prohibited activity to be violative of FINRA Rules 2010 and 3240.
FINRA Public Disclosure confirms that Bashaw has been identified in three customer initiated investment related disputes containing accusations of his misconduct while employed with Kidder Peabody Co. and LPL Financial. In particular, a customer initiated investment related arbitration claim concerning Bashaw’s activities was resolved for $200,000.00 in damages based upon allegations that while Bashaw was associated with Kidder Peabody Co., the customer’s account was churned, and there was a breach of fiduciary duties owed to the customer in regard to the customer’s investment account transactions.
Subsequently, a customer initiated investment related complaint involving Bashaw’s conduct was settled for $10,000.00 in damages supported by accusations that while Bashaw was associated with LPL Financial, Bashaw placed the customer in unit investment trust products that were not suitable for the customer given the customer’s financial circumstances, objectives for investing or tolerance for risk.
Additionally, a customer initiated investment related arbitration claim regarding Bashaw’s activities was resolved for $1,900,000.00 in damages founded on allegations that Bashaw gave the customer poor investment advice concerning the customer’s investments in Air Shuttle, LLC; Bashaw solicited the customer’s investments to be effected outside the firm’s auspices; Bashaw borrowed money from the customer without authorization; Bashaw placed the customer in promissory note investments that were in no way appropriate for the customer; and LPL Financial failed to supervise Bashaw’s activities which caused the customer losses. FINRA Arbitration No. 16-02452 (Nov. 30, 2017).
Bashaw was discharged by LPL Financial based upon accusations that Bashaw borrowed a customer’s funds for purposes of an outside business transaction, and effected private securities transactions without apprising the firm in writing.
