Borrowing Trouble: The Case of Eric A. Dupre

Eric A. Dupre allegedly violated FINRA Rules 3240 and 2010 by borrowing more than $2.2 million from two customers without providing prior notice to or receiving written approval from his firm. As a result of this conduct, FINRA barred Dupre from associating with any FINRA member in all capacities.

Dupre first became registered with FINRA in 1994 as a General Securities Representative and worked through six different firms before joining Ameriprise Financial Services, LLC in June 2020. On December 26, 2023, Ameriprise terminated his registration, citing a violation of company policy related to borrowing from clients. Although Dupre is no longer associated with any FINRA member, he remains subject to FINRA’s jurisdiction.

FINRA Rule 3240 governs borrowing or lending arrangements between brokers and their customers. In plain language, the rule prohibits a broker from borrowing money from a client unless certain conditions are met and the firm approves the arrangement in writing. For example, if a broker’s parent loans the broker money, the firm may allow it because of the immediate family exception.

Likewise, if the customer is a bank that provides loans in the ordinary course of business, borrowing may be permissible with proper notice. However, outside of these narrow exceptions, customer loans are strictly prohibited. A violation of Rule 3240 is also considered a violation of Rule 2010, which requires all brokers to act with honesty and fairness in their professional dealings.

In Dupre’s case, FINRA found that between September 2022 and February 2023 he borrowed at least $2,236,000 from two customers, including $2,171,000 from a 77-year-old customer. Dupre did not disclose the loans to Ameriprise or obtain approval, and the loans were not documented or secured. The elderly client even borrowed against his Ameriprise account to fund the loans, which left him with significant margin debt. Dupre, who was experiencing financial difficulties, lacked a reasonable expectation of repaying the loans and has not repaid any portion of the funds. According to FINRA, this conduct directly violated Rule 3240’s restrictions and failed to meet the ethical standards required under Rule 2010.

Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.

The content on this site reflects personal opinions and does not constitute statements of fact. No findings have been made against the firms or individuals mentioned. This blog is intended solely for educational purposes, drawing on publicly available information to provide general insights and a basic understanding of the law. It is not a substitute for legal advice.