Jeffrey Waldera, of Onalaska, Wisconsin, a stockbroker previously employed by Robert W. Baird & Co. Incorporated, has been fined $7,500.00 suspended for five months from associating with any Financial Industry Regulatory Authority (FINRA) member in all capacities based on consenting to findings that he entered into unauthorized lending arrangements with firm customers and then lied about it when questioned by his firm. Letter of Acceptance, Waiver and Consent, No. 2016050884702 (Oct. 27, 2017).
According to the AWC, between July of 2014 and September of 2015, the written procedures and policies of Robert W. Baird specifically disallowed the firm’s registered representatives such as Waldera from borrowing funds from customers or lending customers money unless the firm was notified and granted approval. Evidently, the written supervisory procedures of the firm detailed that the loans to or from customers would be approved only if the transaction fell into one of the firm’s stated categories. Apparently, there were no permissible conditions that applied in Waldera’s case.
The AWC stated that between July of 2014 and September of 2015. a total of $52,500.00 had been borrowed by Waldera from customers whose accounts Waldera was responsible for servicing. In particular, customer HF lent Waldera $8,000.00 through incremental payments starting in July of 2014, where only $2,000.00 had been repaid to HF. Then, customers JS and RS lent Waldera $32,000.00 through incremental payments between November of 2014 and June of 2015, evidenced through a promissory note calling for Waldera to provide RS and JS with full repayment and ten percent interest in March of 2016. Evidently, Waldera repaid only $7,500.00 to RS and JS.
The AWC further stated that in September of 2015, a total of $12,500.00 was provided to Waldera by customer DH, evidenced by a promissory note that stated that Waldera was to pay DH one percent interest while the loan was outstanding and for Waldera to provide DH with full repayment by September of 2016. Yet, the funds lent by DH were not repaid by Waldera. The AWC revealed that it was not until Waldera’s activities were investigated by his firm that he disclosed the unpermitted borrowing arrangements. FINRA found that Waldera’s improper customer borrowing arrangements violated FINRA Rules 2010 and 2340.
The AWC also revealed that misrepresentations were made by Waldera to his firm in regard to the customer loans. Specifically, Waldera was obligated to provide the firm with notification about the loan arrangements according to the compliance questionnaires administered to him in 2014 and 2015. Waldera purportedly affirmed to his firm during this time that he did not borrow or lend money away from his firm – representations that were false based upon his improper lending arrangements with customers HF and RS. The AWC then stated that Waldera even denied having borrowed money from HF and RS when further questioned by the firm’s management in December of 2015. FINRA found Waldera’s misrepresentations to his firm to constitute conduct violative of FINRA Rules 2010.
FINRA Public Disclosure reveals that on August 30, 2016, a customer initiated investment related complaint involving Waldera’s conduct has been resolved for $25,396.00 in damages supported by accusations that Waldera borrowed funds from the customers while associated with Robert W. Baird & Co., where the loan was never repaid in accordance with the loan’s terms.
On July 13, 2016, Waldera was terminated by Robert W. Baird based on allegations that he engaged in improper lending arrangements in violation of the firm’s procedures and policies.
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