According to a Letter of Acceptance, Waiver, and Consent (AWC), Theodore Serure has agreed to a four-month suspension and a $20,000 fine after borrowing $7.3 million in unreported loans from 16 clients, according to AdvisorHub.
According to the Financial Industry Regulatory Authority (FINRA), Serure's failure to disclose the loans to his firm violated FINRA's 3240. Rule 3240 prohibits advisors from borrowing from or lending money to customers without firm approval. Serure's action also violated FINRA's Rule 2010, requiring high standards of commercial honor. FINRA's rules allow advisors to accept loans from customers only when the arrangement is based on a personal relationship. However, advisors must notify their firms and receive written approval before entering into any loan transactions.
Serure borrowed funds between 2012 and 2020 from his wealthy clients, with whom he shared personal relationships. Serure used some of the loan proceeds from subsequent lenders to pay off prior lenders, according to FINRA.
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