FINRA’s Department of Enforcement investigated Young and alleged he borrowed a total of $208,400 from two of his brokerage customers (a married couple) without disclosing the loans to his employer. According to FINRA, from June 2010 to June 2012, the married couple issued five checks from their MetLife brokerage account to Young. FINRA alleges Young intended to use the funds to settle his deceased father’s estate in a foreign country and to develop real estate properties held by the estate.
FINRA alleges Young violated FINRA Rule 3240, among other rules, which 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.
The aforementioned financial arrangements between Young and two of his brokerage customers constituted personal loans, which Young was required to disclose to MetLife unless certain conditions were met. Indeed, none of the prescribed exceptions under FINRA Rule 3240 were satisfied because the customers were not related to Young, did not have a business relationship with Young outside the registered representative/customer relationship, and Young was not a financial institution engaged in lending. Further, Young borrowed the aforementioned funds from the customers without providing written notice to MetLife.
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 lost money investing with Andre Paul Young, 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.