Kevin Hao Jie Zhang of Dewitt New York a stockbroker formerly registered with Pruco Securities, LLC has been fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that Zhang engaged in an unapproved loan arrangement with a customer of Pruco Securities. Letter of Acceptance Waiver and Consent No. 2017056094402 (Mar. 14, 2019).
According to the AWC, an investigation was commenced by FINRA into Zhang’s activities following Zhang’s termination from Pruco. Particularly, Pruco submitted a Form U5 to FINRA personnel, informing the regulator that on September 29, 2017, it terminated Zhang founded on accusations that loans had been taken by Zhang from multiple customers of Pruco Securities without the firm approving of those arrangements. Additionally, on January 16, 2018, another Form U5 was submitted by the firm which revealed that Pruco Securities determined that Zhang had actually solicited the loans from customers without the firm’s permission, and that Zhang accepted funds from customers.
The AWC noted FINRA Rule 3240 disallowing registered representatives including Zhang from entering into loan arrangements with customers absent the brokerage firm’s procedures authorizing the arrangement and the arrangement meeting certain requirements. However, the firm’s policies specifically disallowed Zhang from borrowing a customer’s funds if the customer was not a member of his immediate family or if the customer was a business which did not regularly engage in loan arrangements.
Supposedly, in November of 2016, Zhang steered an elderly customer towards lending him money. The AWC stated that the customer was not part of Zhang’s family and was not a financial institution in the business of offering loans. Zhang purportedly failed to inform the firm about the loan arrangement, and never obtained permission from the firm to borrow the customer’s funds. Evidently, the customer has not been repaid by Zhang. FINRA found Zhang’s conduct violative of FINRA Rules 2010 and 3240.
FINRA Public Disclosure confirms that Zhang is referenced in a customer initiated investment related complaint on November 28, 2017, where the customer sought at least $10,000.00 in damages based upon allegations of Zhang’s sales practice violations or other violative conduct while associated with Pruco Securities LLC.
