FINRA Bars Ex-Hilliard Lyons Rep With Multiple Customer Complaints

The first complaint, in which a client alleged poor account performance, was denied in 2016. However, the one after it resulted in $445,000 in damages being granted in arbitration to the customer, whose daughter complained of unauthorized and unsuitable trades. Eight other customer complaints were settled and five are still pending. Nearly all of them involved claims of unsuitable and/or unauthorized trading.

On Jan. 23, 2019, F1NRA started an investigation in response to an amended U5 form filed by Hilliard Lyons on Jan. 22, 2019, which identified a customer complaint alleging that Bennett had conducted trading in a client's account without her permission, according to the FINRA AWC letter.

FINRA's investigation of Bennett expanded to include additional claims by other customers alleging similar misconduct, as well as allegations of unsuitable recommendations, the regulator said.

In connection with its investigation, on March 27, 2020, FINRA staff sent a request to Bennett for the production of documents and information, it noted. The deadline to respond to that request was May 15. However, as his counsel stated to FINRA staff during a telephone call on May 14, and by the AWC agreement, Bennett acknowledged that he received FINRA's request but would not produce the documents and information at any time, according to the AWC letter.

By refusing to produce information and documents as requested pursuant to FINRA Rule 8210, Bennett violated that rule and Rule 2010 (governing standards of commercial honor and principles of trade), according to the regulator.

— Check out Why Brokers Must Testify — Or Else on ThinkAdvisor.