Cathy Ione Earnest, of Chicago, Illinois, a stockbroker formerly registered with Pruco Securities, LLC, has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that she failed to furnish complete information to FINRA in the course of FINRA’s investigation into allegations of Earnest’s unauthorized loan arrangement with a firm customer. Letter of Acceptance, Waiver and Consent, No. 2017052944001 (June 19, 2017).
According to the AWC, FINRA was notified that Earnest was terminated from Pruco Securities, LLC, on March 4, 2015, because Earnest did not meet her quotas concerning business production. Subsequently, an additional disclosure was made by Pruco to FINRA on January 4, 2017, which indicated that an elderly customer complained to the firm about lending Earnest $350,000.00 that Earnest neglected to repay when due.
Following up in this regard, by February 8, 2017, FINRA launched an investigation into Earnest’s misconduct and submitted a request to Earnest according to Rule 8210, which called upon her to provide FINRA with information and documentation in reference to the customer’s allegations. Apparently, counsel for Earnest contacted FINRA on March 7, 2017; however only partial disclosures were provided.
Apparently, no information and documentation, such as banking records, referenced the loan arrangement receipt, date or amount of funds borrowed. Moreover, counsel for Earnest reportedly stated that no further response would be provided concerning FINRA’s request. Consequently, FINRA found that Earnest’s failure to cooperate further in the investigation was conduct violative of FINRA Rules 2010 and 8210, resulting in the sanction of a permanent bar.
FINRA Public Disclosure reveals that on January 2, 2017, a customer filed an investment related written complaint involving Earnest’s conduct, in which the customer requested $350,000.00 in damages based upon allegations that the customer and her husband lent Earnest funds that have not been paid back.
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