John Hoyt Williams Jr., of Ridgeland, Mississippi, a stockbroker formerly registered with LPL Financial LLC, has been fined $10,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he sold away from his firm. Letter of Acceptance, Waiver and Consent, No. 2013037675101 (Aug. 28, 2017).
According to the AWC, customers of LPL were referred by Williams to an outside broker-dealer so that customers could obtain non-resource loans that customer’s securities served as collateral for. Apparently, customers’ transactions were encouraged by Williams and had been facilitated by him, wherein he helped customers compile the documentation necessary for the transactions to be consummated with the outside broker-dealer.
The AWC revealed that an estimated $700,000.00 in securities had been pledged by customers to obtain $500,000.00 in non-recourse loans, exposing them to the possibility of incurring a total of $200,000.00 in losses. In return for Williams’ efforts; however, the outside broker-dealer compensated him with a total of $12,800.00.
Evidently, the customers’ transactions were facilitated by Williams outside of LPL Financial’s auspices; he never apprised the firm about the nature of the transactions or somehow obtained authorization by LPL for him to participate in them. Williams even purportedly certified that he never received compensation for effecting securities transactions away from his firm. Consequently, FINRA found that Williams’ conduct was violative of FINRA Rule 2010 and NASD Rule 2040.
Williams’ registration with LPL Financial was terminated on July 5, 2013. From August 8, 2013
to July 10, 2017, he was registered with Cambridge Investment Research, Inc.
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