Timothy Aaron Engelmann of Albuquerque New Mexico a stockbroker formerly registered with LPL Financial LLC has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Engelmann borrowed funds from customers without authorization. Letter of Acceptance Waiver and Consent No. 2019064775801 (Oct. 30, 2020).
According to the AWC, FINRA received a Uniform Termination Notice for Securities Industry Registration (known as a Form U5) from LPL on November 29, 2019 revealing that Engelmann had been terminated based upon allegations that he was loaned money from customers of the securities broker dealer in against company policy.
FINRA determined that in April of 2017, $40,000.00 had been borrowed by Engelmann’s private limited liability company from one customer so this LLC could bankroll a real estate venture. The LLC and the customer entered into a promissory note agreement to solidify the loan terms. FINRA stated that the customer had no family relation to Engelmann. The borrowing arrangement was not made known to the securities broker dealer by Engelmann. The AWC also indicated that Engelmann had been administered a compliance questionnaire by LPL. In submitting this questionnaire on October 31, 2017, Engelmann failed to alert the securities broker dealer about his activities.
The AWC revealed that a second customer loaned Engelmann’s LLC $75,000.00 in October of 2018 for purposes of the LLC financing a real estate venture. There was a promissory note put together which dictated the terms of repayment. This second customer also bore no relation to Engelmann and was not someone who Engelmann was permitted under LPL’s policy to borrow from. Engelmann failed to come clean on compliance questionnaires in regard to his borrowing arrangement with this customer. FINRA found that Engelmann violated FINRA Rules 2010 and 3240.
