South Florida Financial Advisor Suspended for Improperly Borrowing Money from an Elderly Investor
Linda Sue Zara (CRD#: 2322009) is a previously licensed securities broker and registered investment advisor. From August of 2012 to January of 2018, Ms. Zara was employed at Wells Fargo Clearing Services in Boca Raton, Florida. Prior to her time there, she was also associated with several other broker-dealers in the region, including Citigroup Global Markets, Morgan Stanley, and Summit Brokerage Services.
FINRA’s BrokerCheck records indicate that Linda Zara was discharged by Wells Fargo following allegations that she improperly borrowed money from an elderly investor in violation of the firm’s rules. After reviewing the allegations, FINRA suspended Ms. Zara for three months and fined her $5,000 for violating securities industry regulations. Here, our Miami, FL investment fraud attorneys provide an overview of the allegations against this broker.
Suspended Broker: Linda Zara Formerly of Wells Fargo Clearing Services
Between June of 2017 and October of 2017, Wells Fargo financial advisor Linda Zara borrowed approximately $44,000 from one of the firm’s customers. The broker-dealer states that this customer was 94 years old during this time period.
In violation of FINRA Rule 3240 and FINRA Rule 2010, Ms. Zara failed to obtain written authorization from her member firm. Indeed, she did not notify the firm regarding the proposed lending arrangement. Without admitting or denying wrongdoing, she consented to a $5,000 fine and a 90-day suspension.
It should be noted that, in assessing the penalties against this broker, FINRA acknowledged that Linda Zara provided documentation demonstrating that she repaid the full amount that she borrowed from the elderly investor.
Strict Regulations Regarding Borrowing and Lending Between Brokers and Investors
To help provide much needed protection to investors, the Financial Industry Regulatory Authority (FINRA) has put strict rules in place pertaining to borrowing and lending arrangements between registered securities brokers and their customers. More specifically, FINRA Rule 3240 prohibits lending or borrowing agreements between registered representatives and their customers unless:
- The financial advisor’s member firm has created written policies that allow for these types of arrangements; and
- The financial advisor notifies the firm, requests approval for the arrangement, and actually receives approval.
When financial advisors fail to comply with industry rules, it puts investors—especially elderly and vulnerable investors—at significant risk. In obtaining loans from customers, brokers must disclose the specific terms of the arrangement to their member firm—before any funds are exchanged. From there, the brokerage firm will be responsible for overseeing the financial advisor’s conduct. Without disclosure, investors lose a key source of protection.
Speak to a Miami FINRA Arbitration Lawyer Today
At Carlson & Associates, P.A., our Miami investment fraud attorneys are strong, experienced advocates for investor rights. We have deep experience representing investors in FINRA arbitration and securities litigation. If you suffered losses after making a loan to a financial advisor, we can help. To set up a strictly private case evaluation, please call us today. With an office in Miami, we represent clients throughout Florida.
Resource:
brokercheck.finra.org/individual/summary/2322009
https://www.carlson-law.net/summit-brokerage-services-censured-fined-40000-for-failure-to-supervise/