FINRA barred former Citigroup, Morgan Stanley & Securian Financial Services, Inc. broker Kent George Lehman of Orange, California for improperly borrowing money from clients and misrepresenting this activity to his member firm in a ruling affirmed by the National Adjudicatory Council (NAC). FINRA initially disciplined Lehman earlier this year for the dual misconduct, but Lehman elected to appeal that decision, effectively suspending FINRA's proposed sanctions until the NAC's present decision to dismiss the appeal as abandoned.
According to the report, while he was associated with Morgan Stanley and Securian Financial, Lehman borrowed several thousands of dollars from a customer in separate loan transactions in violation of firm policy. The findings state that when he completed a Morgan Stanley sales questionnaire after loaning his client money, Lehman falsely stated that he had not made or received loans to/from clients, effectively concealing the misconduct from both the firm and FINRA.
Upon further investigation, FINRA requested Lehman provide information for outside business activities performed while he was registered with Securian, but Lehman did not satisfactorily respond to several requests for information. FINRA had alleged that Lehman provided financial advisory and planning services to to customers outside the scope of his employment with Securian, in exchange for payment.
The investigation states that the arrangement became further complicated by allegations that Lehman failed to provide one customer with the services promised to her, and that he did not repay this customer. Lehman stated that he did attempt to repay the customer, although FINRA pointed to a lack of evidence in the form of checks or bank account statements that would have supported Lehman's assertion.
After further failure to cooperate with the FINRA staff's investigation, regulators opted to banish Lehman from the industry. After objecting to FINRA's decision via appeal, Lehman ultimately received permanent expulsion from the securities industry thanks to the NAC's default decision, and on the basis of improperly borrowing money from customers and then falsely representing to his firm that he had not.
If you have invested with Kent George Lehman or with any broker or financial advisor who borrowed money from you, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.