Kevin Ray Bonner, of Burien, Washington, a stockbroker formerly registered with Lincoln Financial Securities Corporation, has been fined $2,500.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member by consenting to findings that included, inter alia, Bonner’s failure to disclose a customer loan arrangement which he later defaulted on. Letter of Acceptance, Waiver and Consent, No. 2016049664001 (Sept. 19, 2017).
According to the AWC, Lincoln Financial Securities Corporation customer DG had accounts serviced by Bonner between 1995 and 2014. During that period, DG was also apparently a customer of Bonner Financial Services – a company that Bonner created to offer customers accounting and tax preparation services as well as fixed annuities and life insurance products.
On June 20, 2008, customer DG lent Bonner $50,000.00, where the customer’s money was to be paid back by Bonner in the short-term. The AWC stated that the loan was never documented; there were no specific terms including the interest rate and payment due date. Evidently, only $10,000.00 of the $50,000.00 was repaid by Bonner to customer DL by March of 2013.
The AWC stated that it was not until March 5, 2013, that customer DG and Bonner documented the customer loan through a promissory note, providing that the customer was to be paid four percent interest with the remainder of unpaid principal to be paid by Bonner by March 5, 2014. The AWC revealed that Bonner paid $15,000.00 but defaulted on the remainder. Consequently, a total of $24,327.00 in principal and interest was due to customer DG, but was discharged through Bonner’s 2014 bankruptcy.
Apparently, Lincoln Financial Group disallowed Bonner from borrowing from customers in situations where the customer was not a family member or where the loan was not offered through a financial entity on terms available to the public. Bonner’s undisclosed loan transaction served the basis of his termination from Lincoln Financial Securities on May 31, 2016. FINRA found that his conduct was violative of FINRA Rules 2010 and 3240, as well as NASD Rules 2110 and 2370.
FINRA Public Disclosure confirms that on March 4, 2008, a customer filed an investment related written complaint involving Bonner’s conduct, in which the customer requested $25,722.93 in damages based upon accusations that Bonner, while associated with Jefferson Pilot Securities Corporation, made unsuitable investment recommendations to the customer, effected trades in the customer’s managed asset account on an excessive basis, and failed to inform the customer regarding tax consequences of transactions.
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