FINRA’s Department of Enforcement investigated Rankin and alleged he entered into two personal loans and promissory notes with a customer while employed by Lexington Investment. According to FINRA, beginning in May 2010, Rankin borrowed approximately $29,000 from the customer in two transactions, but failed to make any payments on the loan. FINRA also alleged Rankin failed to notify anyone at Lexington about the promissory notes, and did not seek written approval before borrowing funds from the customer.
FINRA alleged Rankin violated several FINRA rules and regulations, including NASD Rule 2370 and FINRA Rule 3240. FINRA Rule 3240 prohibits registered persons from borrowing money from or lending money to any customer certain conditions and/or exceptions are satisfied. Specifically, FINRA Rule 3240 prohibits registered persons from borrowing money from or lending money to any customer unless: 1) the representative’s employing member firm has written procedures allowing borrowing from or lending to customers; 2) the borrowing or lending meets at least one of the conditions specified in Rule 3240(a)(2); and 3) the registered person notifies the firm of the borrowing or lending arrangement and obtains pre-approval in writing. A violation of FINRA Rule 3240 also constitutes a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principals of trade.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damages with Rankin, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please complete the contact form or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.