South Florida Arbitration & Litigation Lawyer Blog
Outside Business and Unsuitable Activity FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
November, 2011:
Edgar Rhodes Hauser Jr. (CRD #723243, Registered Representative, Livingston, Alabama) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Hauser consented to the described sanction and to the entry of findings that at Hauser’s request, firm customers borrowed a total of $202,000 from the cash value accumulated in whole life insurance policies that Hauser previously sold to them. The findings stated that Hauser then borrowed the funds from these customers, pursuant to secured (as to two of the loans) and unsecured (as to one of the loans) promissory notes providing for annual interest. The findings also stated that Hauser has not made interest or principal payments on the notes. FINRA found that the firm’s WSPs prohibit associated persons from engaging in borrowing or loaning funds with a customer, unless the customer is an immediate family member and the firm provides prior written approval; none of the customers from whom Hauser borrowed funds were members of Hauser’s immediate family, and Hauser did not seek or receive prior approval for the loans. (FINRA Case #2010023178101).