Lawrence Richard Brockman, of Poland, Ohio, a stockbroker registered with Moors Cabot Inc., has been fined $20,000.00 and suspended for 22 months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Brockman borrowed money from a customer against Moors Cabot Inc. policies. Letter of Acceptance, Waiver, and Consent No. 2022076528901 (March 4, 2024).
On October 11, 2022, Moors Cabot Inc. filed a Uniform Termination Notice for Securities Industry Registration (Form U5), stating that Brockman’s stockbroker registration was terminated because of his non-compliance with the firm’s supervisory procedures related to borrowing from or lending to customers. FINRA’s investigation into Brockman arose from its examination of Moors Cabot’s Form U5 filing.
Moors Cabot’s supervisory procedures prohibited stockbrokers from borrowing money from their customers, except under certain conditions, without obtaining the firm’s prior written approval. In violation of these policies, in July 2018, Brockman borrowed $22,500.00 from a customer at Moors Cabot.
Brockman neither sought nor received approval for this loan from Moors Cabot. Instead, he concealed the transaction by directing the customer to transfer the loan proceeds to his wife’s personal checking account. The loan was neither documented in writing nor accompanied by a promissory note. Also, Brockman falsely claimed on at least three annual compliance questionnaires submitted to Moors Cabot that he had not received any loans from customers.
After the customer’s death in September 2018, Brockman discontinued loan repayments, having paid only $2,076.00 towards the loan. He also refused further repayments to the customer’s estate. Moors Cabot became aware of the loan arrangement in August 2022 following contact from the estate’s lawyer.
Therefore, Brockman violated FINRA Rules 3240 and 2010.
FINRA Public Disclosure shows that Brockman is referenced in four customer initiated investment related disputes concerning his conduct while associated with securities broker dealers. On January 8, 2003, a customer filed an investment related complaint involving Brockman’s conduct in which the customer alleged unsuitable trading in over-the-counter equities and stocks during the time that Brockman was associated with Salomon Smith Barney. The complaint was withdrawn on March 10, 2005.
Brockman was also referenced in a customer initiated investment related complaint filed on May 27, 2009, in which the customer requested compensatory damages based upon allegations that Brockman engaged in unauthorized trading in stocks when Brockman was associated with Citigroup Global Markets Inc. The complaint was withdrawn.
On May 15, 2019, another customer initiated investment related FINRA securities arbitration claim involving Brockman’s conduct was settled for $10,000.00 in damages based upon allegations that Brockman made unsuitable recommendations in stocks during the time that Brockman was associated with Morgan Stanley Smith Barney. The customer alleged damages related to purchases of SDRL from June of 2013 to October of 2014. FINRA Arbitration No. 18-04109.
Brockman was associated with Moors Cabot Inc. in Poland, Ohio from January 29, 2016, to October 11, 2022.
