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Regulation and Compliance > Federal Regulation > FINRA

Ex-LPL Rep Suspended for Allegedly Sending Client Data to Wife

By Melanie Waddell

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The Financial Industry Regulatory Authority has fined a former LPL rep $5,000 and suspended him for two months for allegedly misapproprating the personal information of 2,300 customers.

According to FINRA’s order, in anticipation of leaving his former employer, Infinex, in June 2022, Nathaniel Adams “improperly emailed an unencrypted spreadsheet containing” the birth dates, Social Security and driver’s license numbers, account numbers, and tax information of thousands of customers to his wife’s personal email account and then, from that account, he emailed the spreadsheet to the email account of a contact at his prospective employer, LPL.

He faced four felony charges in Polk county, Florida, that were dismissed in February.

AdvisorHub reported on June 20 that the emails were sent to Adams’ wife.

Adams sent these emails without the firm’s or customers’ consent and in contravention of the firm’s procedures, violating FINRA Rule 2010, according to the order.

From February 2016 through July 2022, Adams was registered with FINRA through Infinex Investments Inc. — now known as Osaic Institutions Inc. — as a general securities representative.

He registered with FINRA through LPL Financial as a general securities rep in July 2022.

In October 2022, LPL filed a Uniform Termination Notice for Securities Industry Registration terminating Adams’ registration because he “[f]ailed to adhere to onboarding requirements concerning customer information maintained at former broker-dealer.”

In June 2022, Adams downloaded nonpublic personal information from Infinex’s systems into a spreadsheet, which included customers that Adams did not service, the order states.

“Adams named the file ‘important dates to put on calendar’ and, without the consent of the firm or the customers, sent it unencrypted via his firm email to a family member’s private email address, in contravention of the firm’s procedures,” the order states.

He then forwarded the email containing the spreadsheet “to a contact with whom he expected to work at LPL Financial,” the order states.

After Adams resigned from Infinex in July 2022, the firm discovered the email and attached spreadsheet, which contained Infinex customers’ nonpublic personal information, and informed LPL Financial of its discovery, according to the order.

“The nonpublic personal customer information was deleted following reviews of all devices and email accounts,” the order states.

Melanie Waddell

@Think_MelanieW

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