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Regulation and Compliance > Federal Regulation > FINRA

FINRA Bars Ex-LPL Broker Who Allegedly Took an Older Client’s Funds

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What You Need to Know

  • LPL terminated the former broker for allegedly failing to disclose outside business activity to the firm.
  • A client alleged that the broker misappropriated funds from her account and she requested $1.24 million in damages.
  • The broker declined to cooperate with FINRA's investigation into his alleged theft from a client — a surefire way to be barred from the industry.

A former LPL Financial broker who allegedly converted a senior client’s funds has been barred by the Financial Industry Regulatory Authority from associating with any FINRA member firm in all capacities after he refused to cooperate with the industry self-regulator’s investigation into his actions at LPL.

Without admitting or denying the findings of FINRA’s investigation, Eric Shea Hollifield signed a FINRA letter of acceptance, waiver and consent on Sept. 29 in which he consented to be barred from the industry. FINRA signed the letter on Thursday, agreeing to settle the charges.

Few details were provided in the AWC letter about Hollifield’s alleged theft from his client.

But a disclosure on Hollifield’s report at FINRA’s BrokerCheck website says there was a client dispute in which “the customer alleges that registered representative misappropriated funds from her account” between August 2020 and his termination from LPL on Aug. 12 for allegedly failing to disclose outside business activity to the firm. The client requested damages of $1.24 million, and the dispute was still pending.

On Sept. 10, LPL filed a Form U5 Termination Notice ending Hollifield’s association with the firm for allegedly failing to disclose outside activity to the firm, according to FINRA.

LPL did not immediately respond to a request for comment on Friday about its former broker being barred.

After leaving LPL, Hollifield became associated with Hamilton Investment Counsel but was terminated due to allegedly failing to disclose outside activity to the firm, according to FINRA.

On Sept. 21, in connection with its investigation into Hollifield’s potential conversion of funds from the senior client, FINRA staff sent a request to Hollifield for his on-the-record testimony scheduled for Sept. 30, 2021. On Sept. 21, FINRA staff sent a request to Hollifield for documents and information due on Oct. 5.

However, as stated during Hollifield’s phone call and in his email with FINRA staff, Hollifield acknowledged he received FINRA’s requests dated Sept. 21, and would not appear for on-the-record testimony or produce the documents and information requested at any time, according to FINRA.

Not cooperating with a FINRA investigation is a surefire way for a broker to be barred.

By refusing to appear for on-the-record testimony or to produce the documents and information, Hollifield violated FINRA Rules 8210 and 2010.

Hollifield first entered the securities industry in 1998. Before joining LPL in October 2016, he was affiliated with Sterne Agee Financial Services as a broker from 2008 to 2016, H&R Block Financial Advisors from 2003 to 2008 and Merrill Lynch from 1998 to 2003.

(Photo: Adobe Stock)