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Ex-J.P. Morgan Rep Claimed He Ran Gardening Business to Get COVID Loan: FINRA

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What You Need to Know

  • The ex-broker has been suspended from the industry for seven months by FINRA.
  • He made multiple misrepresentations when applying for the SBA COVID loan and was not qualified to receive it, FINRA says.
  • In recent months, FINRA has sanctioned several brokers accused of improperly applying for COVID loans.

Another former J.P. Morgan broker has been sanctioned by the Financial Industry Regulatory Authority after improperly applying for and receiving a COVID-19 Economic Injury Disaster Loan from the Small Business Administration, claiming he owned a gardening business to qualify, according to FINRA.

In the application for the loan, Kenny Mejia allegedly “recklessly misrepresented” that he owned a gardening business that he founded in 2019 and operated as a sole proprietorship out of his home, using his personal phone number and email address, and the business earned revenue and incurred costs in the 12 months prior to Jan. 31, 2020, according to FINRA.

However, at the time, Mejia was a registered representative of J.P. Morgan “with no disclosed outside business activities, did not then own a gardening business or any other business eligible for an Economic Injury Disaster Loan from the SBA,” FINRA alleged.

Without admitting or denying FINRA’s findings, Mejia signed a FINRA letter of acceptance, waiver and consent on Nov. 1, consenting to the seven-month suspension. FINRA signed the letter on Thursday.

J.P. Morgan declined to comment on Monday. Attorney Celiza Braganca of the firm Braganca Law in Skokie, Illinois, who represented Mejia in the dispute with FINRA, did not immediately respond to a request for comment.

Mejia first became registered with FINRA in October 2014 as an investment company and variable contracts products representative and broker through an association with J.P. Morgan Securities, according to his report on FINRA’s BrokerCheck website.

On Feb. 8, 2021, J.P. Morgan filed a Form 5 Uniform Termination Notice stating that Mejia was discharged “after applying for, and receiving, a small business administration loan without a legitimate business purpose.”

Since then, from March to August, Mejia was registered with FINRA through an association with another FINRA member firm, the industry self-regulator noted, without identifying that firm. However, his BrokerCheck report shows that it is Centaurus Financial and that he is no longer a registered broker.

More Misrepresentations

In June 2020, after receiving advice from a friend about the Economic Injury Disaster Loan Program, Mejia submitted an application to the SBA for a loan, according to the FINRA AWC letter.

Before submitting the application, Mejia didn’t review the Economic Injury Disaster Loan program requirements to determine his eligibility and also didn’t review any instructions concerning the application, the AWC letter says. He completed and submitted the application using his cellphone and without referring to any documentation, according to the letter.

More on this topic

“Based on Mejia’s misrepresentations, the SBA provided him with a $1,000 Economic Injury Disaster Loan advance,” the letter says. Mejia didn’t complete a loan agreement for the loan and the SBA withdrew his loan application from consideration due to inactivity, according to FINRA.

Before being terminated, when questioned by J.P. Morgan investigators, Mejia “made additional misrepresentations, including that he had filed the Economic Injury Disaster Loan application on the advice of his tax preparer,” according to the letter. Mejia still had not repaid the $1,000 to the SBA, according to FINRA.

As a result of his actions, Mejia violated FINRA Rule 2010, governing standards of commercial honor and principles of trade, according to FINRA.

More SBA Loan Trouble

Over the past several months, FINRA has sanctioned a number of brokers for improperly applying for COVID disaster loans.

Another ex-J.P. Morgan rep, Latonya L. Anderson, was recently suspended from associating with any FINRA member in all capacities for nine months and fined $12,500, also for improperly applying for and receiving a COVID-19 Economic Industry Disaster Loan.

Merrill Lynch broker Manuel Pinazo was recently barred by FINRA after improperly applying for and receiving the same type of loan and then declining to cooperate with FINRA’s investigation of his actions.

Another ex-Merrill brokerScott Madison, signed a FINRA letter of acceptance, waiver and consent on Aug. 18, agreeing to be barred from the industry for the same reason.

Other brokers sanctioned by FINRA in recent months on accusations of improper EIDL filings included Kenric L. Sexton, a former Wells Fargo broker who was fined $2,500 and suspended for one month for allegedly making “negligent misrepresentations” in an application to the SBA seeking the loan, FINRA said in July.

(Photo: Shutterstock)