Michael Scott Lincoln of San Diego California a stockbroker formerly employed by LPL Financial LLC is referenced in a customer initiated investment related arbitration claim which was settled for $275,000.00 in damages founded on allegations that (1) trades placed in the customer’s investment account were unsuitable for the customer (2) the customer’s investment affairs were administered negligently (3) transactions had been executed in violation of California laws (4) fiduciary duties were violated and (5) the customer had been defrauded in connection with promissory note and mutual fund products sold to the customer during the time that Lincoln was a supervising stockbroker with LPL Financial LLC. Financial Industry Regulatory Authority (FINRA) Arbitration No. 16-03527 (Apr. 19, 2017).
FINRA Public Disclosure additionally reveals that this is the first customer initiated investment related arbitration claim in regard to Lincoln’s conduct since he was sanctioned by FINRA. In particular, Lincoln has been fined $15,000.00 and suspended from associating with any FINRA member in any capacity based upon consenting to findings that during the time Lincoln was associated with LPL Financial LLC: (1) Lincoln neglected to supervise one of the firm’s stockbrokers who engaged in an unapproved outside business activity and who procured loans from customers without authorization; and (2) Lincoln falsified statements to the firm in regard to both his supervision of the stockbroker who engaged in those unauthorized activities as well as Lincoln loaning funds to that stockbroker. Letter of Acceptance Waiver and Consent No. 2015045352901 (Sept. 20, 2016).
Evidently, Lincoln authorized the documents provided by stockbroker, RS, in reference to an outside business activity that RS engaged in. The AWC stated that Lincoln knew that information RS disclosed in reference to that outside business activity was false, and that Lincoln failed to investigate the true nature of activities RS engaged in which consisted of borrowing funds from customers for an outside business activity. Evidently, a total of seven customers lent RS a total of $2,250,000.00 relating to outside real estate transactions. Those loans were reportedly prohibited by the firm and lacked any supervision from Lincoln. Lincoln evidently lied to his firm about the loans – some of which apparently came from Lincoln himself. FINRA found Lincoln’s conduct violative of NASD Rule 3010(b) and FINRA Rule.
