Former Merrill Lynch representative suspended by FINRA over violation in seeking pandemic loan

On Behalf of | Aug 5, 2021 | FINRA Compliance

A former Merrill Lynch representative in New Jersey has been suspended over what were deemed to be improprieties in an application for a pandemic relief loan, according to AdvisorHub.

The Financial Industry Regulatory Authority (FINRA) imposed a seven-month suspension against Evelyn Batista. The case involved her application for $17,500 in financial assistance in the form of an Economic Injury Disaster Loan from the Small Business Administration.

FINRA’s letter of Acceptance, Waiver, and Consent (AWC) said Batista claimed she owned a property management business that had lost $15,000 in rental income due to the pandemic, and she subsequently received the full amount she had requested.

But according to FINRA, Batista “recklessly misrepresented” that she owned the business in her application, and did not have any business eligible for this type of loan. The organization said she violated FINRA’s “catch all” Rule 2010, which requires registered representatives to observe high standards and not engage in any unethical business-related misconduct, regardless of whether securities are involved.

Batista signed the AWC without accepting or denying the findings. A fine was not assessed due to her inability to pay as reflected by her financial statements. According to the AWC, the representative repaid the loan with interest following her termination.

While FINRA has been scrutinizing certain registered representatives who accepted pandemic relief funds for any violations of federal securities laws or FINRA rules, the report said the investigation of Batista was not part of that process. Rather, the investigation stemmed from the representative’s Form U5 disclosure after she was terminated by Merrill Lynch in October 2020 due to the same allegations.

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