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Broker suspended over unreported loans from clients, including Nobel Prize winner

On Behalf of | Nov 18, 2022 | Financial Advisor Misconduct

A former broker for J.P. Morgan Advisors has been suspended in a case involving unreported loans, according to a report by AdvisorHub.

The Financial Industry Regulatory Authority announced the four-month suspension along with a $20,000 fine against Theodore M. Serure, who is now with Jefferies LLC.

FINRA said that Serure had allegedly borrowed $7.3 million in unreported loans from 16 wealthy clients who were also long-time friends, including a billionaire, a Nobel Peace Prize winner and a former CEO of a major financial institution. The loans, which occurred between 2012 and 2020, were repaid but Serure did not disclose to them to his firm in violation of FINRA regulations.

He was found to have violated Rule 3240, which prohibits borrowing from or lending money to customers without prior approval, and Rule 2010, requiring members to observe high standards of commercial honor and just and equitable principles of trade. Under the authority’s regulations, brokers can borrow from customers when the arrangement is based on a personal relationship provided they notify their firm and receive written approval.

FINRA discovered the loans during a regulatory examination, adding that Serure used some of the loan proceeds to pay off earlier customer loans. None of the clients involved filed any complaints.

Serure did not admit or deny the allegations, but agreed to the penalties detailed in FINRA’s letter of acceptance, waiver and consent.

Serure was terminated by J.P. Morgan in 2019 after being accused of violating company e-mail policies and later joined Jefferies.

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