FINRA fined and suspended LPL Financial broker Scott Richard Hansen for preparing a will and trust agreement for an elderly customer who eventually passed away after signing the document that Hansen created. According to FINRA, the improperly credentialed Hansen did not have permission to create such a document and accordingly engaged in an unapproved outside business activity, even going so far as to allegedly threaten his customer's family with a lawsuit if they didn't pay for his services.
According to AWC #2019064872501, Scott Hansen (CRD #2837763) prepared a will and irrevocable family trust agreement for a 70-year-old LPL client who was in hospice care, despite Hansen having never attended law school and not being an actual lawyer.
The findings state that after the customer signed the document and died shortly thereafter, Hansen charged the family for the will and trust agreement, stating that "failure to pay within 14 days will result in a legal claim against the Estate and all legal fees associated."
Hansen also purportedly threatened the customer's family with a lawsuit if he did not receive payment for his services, which investigators determined constituted an unapproved outside business activity.
According to a civil injunction in the Colorado Supreme Court, Hansen engaged in the unauthorized practice of law and according to the Colorado Division of Securities, Hansen stipulated to said injunction.
Hansen's file indicates that since leaving LPL Financial in April 2020, he founded and serves as CCO/investment adviser rep for Black Coffee Investment Management in Moab, Utah.
It should generally go without saying that non-registered individuals—whether in securities or law (or both)—should not attempt to conduct business in an activity for which they are not licensed.
FINRA has a track record of punishing brokers who create trusts or enter into powers of attorney with elderly investors when investigators believe the broker has not acted in the best interests of their client. For instance, FINRA in April 2020 barred ex-JP Morgan stockbroker Steven Jun Lu for entering into a power of attorney with an elderly customer that gave Lu power of his client's financial affairs and appointed him co-trustee over her assets.
According to investigators, Lu pretended to befriend the elderly client only to then take advantage of the customer's Alzheimer's condition to structure an agreement to inherit 75% of trust assets upon the customer's death.
Another example of such elder abuse is the case of former Ameriprise Financial Services broker Robert Charles Torcivia, whom FINRA disciplined in 2018 for failing to disclose fiduciary and beneficiary designations from multiple elderly customers that resulted in Torcivia inheriting over $160,000 from elderly customers' IRA and trust accounts.
If you or a loved one invested with Scott Richard Hansen or with any broker or financial adviser who drafted or prepared a will and trust agreement or other power of attorney/beneficiary document, and this arrangement has proven harmful to your investments or interests through the broker being entitled to unexplained and excessive inheritance, commissions, fees, or other unsuitable financial arrangements, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.