The Financial Industry Regulatory Authority fined an ex-LPL Financial and ex-Woodbury Financial broker $10,000, claiming she broke several LPL rules regarding relationships with clients, violating FINRA Rule 2010 governing standards of commercial honor and principles of trade.
Specifically, former broker and RIA Jodie Lane accepted gifts worth more than $100 from a client, acted as power of attorney for the same client, was designated as a beneficiary on the client’s account, and had check writing authority over the client’s account — all without receiving LPL approval, FINRA claimed.
On top of all that, Lane also stated in three annual compliance questionnaires that she did not have any customer relationships such as a power of attorney to report nor had she received gifts valued at more than $100 from any client, which “was not true,” according to FINRA.
Without admitting or denying FINRA’s findings, Lane signed a letter of acceptance, waiver and consent Tuesday in which she agreed to pay the fine and be suspended for four months from association with any FINRA member in any capacity. FINRA accepted the letter Wednesday.
However, Lane is no longer an RIA or registered broker, according to FINRA’s BrokerCheck website. She voluntarily resigned from LPL in July 2017, the AWC letter stated.
The firm filed a Form U5 terminating her registration on Aug. 8, 2017, and then amended the Form U5 on Oct. 24, 2017, stating it started a review of Lane tied to her actions with the client, according to FINRA. Lane joined Woodbury in 2017 but left this year for a reason unspecified in the AWC letter.
LPL declined to comment Thursday. Woodbury parent Advisor Group and Jonathan Hackbarth, an attorney with Quarles & Brady — the law firm representing Lane in the dispute — did not immediately respond to requests for comment.
A client identified in the letter only as “NL” was Lane’s long-time customer — as well as Lane’s “second cousin once removed.” The client followed Lane to LPL when the broker joined the firm in 2011, according to FINRA.
Between May 2011 and July 2017, Lane “circumvented” LPL’s written supervisory procedures with respect to the accounts of NL, who died in May 2017, according to the AWC letter.
In April 2011, NL granted Lane three powers of attorney over NL’s financial affairs: a health care POA, a general financial POA and a POA over NL’s outside checking account, which included the power to withdraw funds from and write checks on NL’s checking account, according to FINRA.
In addition, contrary to LPL’s prohibition on advisors receiving gifts, Lane accepted $154,299 in gifts from NL between May 2015 and May 2017 by transferring the funds from NL’s checking account to Lane’s accounts.
Furthermore, NL designated Lane as the transfer on death beneficiary for two of NL’s brokerage accounts in 2016, according to FINRA, noting that, at the time, the total value of the accounts was about $768,000.
Lane was aware of that designation, but did not notify LPL as required by the firm’s procedures, FINRA alleged. Lane also did not designate the accounts as employee-related and, when NL died, Lane inherited more than $715,000, according to FINRA.
As part of an apparent separate investigation, on Dec. 10, 2019, FINRA made a preliminary determination to recommend disciplinary action be taken against Lane over potential violations that included conducting business outside her firm without notifying it first, according to a detailed report on the BrokerCheck website.
This separate investigation is still pending, according to FINRA.