Lance Shaw of Havcrford, Pennsylvania, formerly registered with LPL Financial LLC, was recently barred from the Financial Industry Regulatory Authority (FINRA) after failing to respond to the FINRA Staff for “information.”
FINRA suspended Shaw in May 2016, but decided not to bar him until August 2016. Why FINRA wanted to talk to Shaw is a secret but we have our ideas.
Although not reported on his current Public Disclosure, we know that Shaw was terminated by LPL Financial in March 2015, for allegedly the “implementation of an investment strategy that was unsuitable” and the “excessive trading of a retirement account.” Shaw’s termination from LPL appears to have disappeared from his regulatory records in 2016.
However, since then, FINRA Public Disclosure reveals that Shaw has been identified in ten customer initiated investment related disputes containing allegations of his misconduct while employed with LPL Financial, LLC and his prior employers.
In 2008, a customer initiated investment related written complaint where Shaw was alleged to have effected excessive and unauthorized trades was settled. Also, in 2o08 another customer initiated investment related written complaint regarding Shaw’s activities was settled .
In 2015, a customer initiated investment related written complaint for unauthorized trading was settled, in September 2015, another customer initiated investment related written complaint involving Shaw’s activities was settled.
In October 1, 2015, another customer initiated investment related written complaint involving Shaw’s conduct was settled and on October 16, 2015, another customer initiated investment related written complaint concerning Shaw’s activities was settled.
Two weeks later, ao October 29, 2015, another customer initiated investment related arbitration claim involving Shaw’s conduct was settled for $60,000.00 based upon the allegations that Shaw engage in short term unauthorized speculative trading in the customer’s account.
Another customer initiated investment related arbitration claim regarding Shaw’s conduct was settled for in January 2016 for $250,000.00 against based upon the allegations that Shaw effected unsuitable and unauthorized trades a customer’s retirement account.
Shaw was terminated by LPL in May 2015.
Maybe FINRA was investigating all these complaints.
Maybe FINRA was investigating Shaw’s undisclosed criminal arrests.
On June 24, 2014, and again on August 10, 2014, Shaw was arrested at his home in Pennsylvania, and among other things, was charged with harassment, aggravated assault and reckless endangerment. See, e.g. Commonwealth v. Shaw, MJ-38107-CR-0000110-2014 (Jun. 24, 2014); Commonwealth v. Shaw, MJ-38107-CR-0000132-2014 (Aug. 10, 2014).
We know that Shaw failed to disclose these arrests until sometime in late 2015, after he was fired by LPL. For the sake of full disclosure, we know this because we represented one of his securities fraud victims. We also know that at the time of his termination from LPL Financial, Shaw owed LPL Financial a very large chunk of change in the form of a forgivable or up-front loan LPL gave him, which following his termination, Shaw was required to pay back.
However, why FINRA barred Shaw or what FINRA was investigating in May 2016, the Philadelphia District Office of FINRA offers no clue.
Shaw was apparently suspended for not responding to a FINRA request, and his suspension became a bar only after he failed to request the termination of his suspension after three months. Instead of being barred in a formal disciplinary action for the failure to comply with FINRA Rule 8210, which requires members to provide information to FINRA or face expulsion, Shaw was merely suspended by way of a “Letter” from the Staff. However unlike formal Disciplinary Actions, Letters from the Staff are not reported on FINRA Disciplinary Actions Online and are otherwise secret. (FINRA did the same thing, the secret suspension by letter, in the case of Brian Patrick Murphy in October 2016. FINRA kept the circumstances surrounding Murphy’s bar a secret until he was arrested last week by the Burlington County Prosecutors Office and charged with the theft of almost $1 million from his customers).
A Letter, of course involves less work for the Staff, and hence optimizes or results in the most efficient allocation of scarce enforcement resources. Also, if no one knows why Shaw was being investigated, it is certainly better that way for his prior employers whom might be sued for his misconduct. Moreover, now that Shaw is barred, no one has to report any additional customer complaints or arbitrations involving his conduct. So it is a win, win for everyone, except of course his victims.
Guiliano Law Group
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