FINRA Bars Ex-LPL Rep Over ‘Reckless Misrepresentations’
The former broker signed seven loan agreements for a client without the firm's authorization, FINRA says.
The Financial Industry Regulatory Authority barred an ex-LPL Financial broker from association with any FINRA member in any capacity for allegedly making “reckless misrepresentations of material fact in seven agreements he signed in connection with loans” a client of his obtained from three banks, according to FINRA.
Without admitting or denying the findings, Patrick M. Coogan signed a letter of acceptance, waiver and consent March 17 in which he agreed to FINRA’s sanction. FINRA accepted the letter Wednesday.
LPL and Phillip E. Foco, a partner at Bienvenu Bonnecaze Foco Viator & Holinga, the Baton Rouge, Louisiana law firm that represented Coogan in the FINRA dispute, did not immediately respond to requests for comment Thursday.
Coogan became registered as a general securities representative through LPL in June 2009 and then became registered through LPL as a general securities principal in November that year, according to the FINRA AWC letter.
However, on April 11, 2018, LPL filed a Form U5 terminating his registration, claiming he signed agreements in the name of the firm “without the requisite authority, in violation of firm policy.”
There are no disclosures listed for his 15 years as a registered FINRA broker, according to his profile on FINRA’s BrokerCheck website. He is not currently registered as a broker or as an RIA, according to BrokerCheck.
Between September 2013 and May 2016, Coogan’s customer, identified as “JS” in the FINRA letter, obtained loans from three banks, according to FINRA. “JS pledged assets in JS’s LPL brokerage account as collateral for the loans, which together had a principal amount” of well over $1 million, and the client “overpledged” the assets of the account to obtain the loans, FINRA claimed.
To provide funds to JS, each bank required a control agreement signed on behalf of LPL, and Coogan signed seven of those agreements with the lender banks in connection with the loans, according to FINRA. Coogan “did not request, or obtain, approval from LPL to sign any of these agreements,” and he did not inform LPL that he signed the agreements until after the relevant period, FINRA claimed, adding “each of these seven agreements contained material misrepresentations.”
In all seven agreements, Coogan claimed he was authorized to sign on behalf of LPL despite not being authorized to do so, according to FINRA. By making all of the misrepresentations, Coogan “enabled JS to improperly obtain multiple loans by over-pledging” the account’s assets, FINRA said, adding he either “knew or was reckless in not knowing that the agreements contained misrepresentations.” He also “became aware of red flags that should have alerted him that the agreements may have contained misrepresentations,” according to FINRA.
As a result of his conduct, Coogan violated FINRA Rule 2010 (governing standards of commercial honor and principles of trade), FINRA said.