FINRA’s Department of Enforcement investigated Laverty and alleged he entered into several personal loans and promissory notes with at least five customers while employed by Oppenheimer and UBS. According to FINRA, beginning in 2009, Laverty accepted three loans totaling $585,000 from a married couple. From 2010 to 2013, Laverty accepted three other loans from another married couple in the approximate amount of $620,000. Finally, in the fall of 2013, while registered with Oppenheimer, Laverty borrowed a total of $32,500 from another customer.
FINRA also alleged Laverty failed to notify anyone at Oppenheimer or UBS about the promissory notes, and did not seek written approval before borrowing funds from the customers. Indeed, Laverty falsely denied that he had borrowed from any customers in annual questionnaires he completed for UBS in 2011 and for Oppenheimer in 2012 and 2013.
FINRA alleged Laverty 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 Laverty, 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 below or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.