Jeffrey E. Rodgers, a registered representative with Morgan Stanley, was charged by the Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Rodgers accepted an unauthorized customer loan, engaged in outside business activities, made false statements on an annual compliance questionnaire, and failed to provide documentation and information to FINRA pursuant to Rule 8210. Department of Enforcement v. Rodgers, No. 2013036836801 (Sept. 28, 2015).
According to the Complaint, from January, 2011 thgrough December, 2012, Rodgers had borrowed $38,600 from two of his firm’s customers, AA and BU, who both had brokerage accounts with his firm. The Complaint noted that Rodgers had failed to repay the majority of funds borrowed form the clients. He reportedly received the funds in violation of his firm’s written procedures, and also in violation of FINRA Rules 2010 and 3240.
The Complaint further indicated that from March, 2012 through April, 2013, while employed with the firm, Rodgers had engaged in outside business activities in the capacity of a software salesman for a business consultancy and information technology company. Such activities, in which Rodgers received compensation in connection with, went unreported to his firm and were therefore unapproved. FINRA found Rodgers’s conduct to be in violation of FINRA Rules 2010 and 3270.
Around June 3, 2011 and April 26, 2012, Rodgers, according to the Complaint, lied to his firm about borrowing money from the firm’s clients. Rodgers reportedly lied about his outside business activities as well. Finally, Rodgers, from August, 2013 through April, 2015, allegedly failed to provide FINRA with information and documentation as well as provide any testimony in reference to FINRA’s requests, pursuant to Rule 8210.
According to FINRA Rule 3240, individuals like Rodgers associated with a member in any registered capacity are prohibited from borrowing funds form a customer unless the firm’s written procedures permit the borrowing.
According to FINRA Rule 3270, no registered person like Rodgers may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his/her member firm, unless he/she is provided prior written notice to the member.
FINRA registered representatives like Rodgers who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and equitable principles of trade.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
