FINRA Fines and Suspends Advisor for Selling Away and Receiving Client Loans
From the desk of Jim Eccleston at Eccleston Law
The Financial Industry Regulatory Authority (“FINRA”) has sanctioned Jose Antonio “Tony” Navarro for selling unapproved investments and borrowing funds from clients. As reported by AdvisorHub, the settlement imposes a $20,000 fine and a one-year suspension from associating with any FINRA member firm in all capacities.
According to the FINRA Acceptance, Waiver and Consent letter (“AWC”), between May 2017 and March 2020, Navarro recommended that five customers invest a total of $87,500 in an alternative energy company while registered with LPL Financial and later Independent Financial Group (“IFG”). Navarro personally invested in the company, introduced clients to its leadership, and facilitated their investments. The company ultimately filed for bankruptcy in July 2022.
The AWC notes that Navarro falsely certified on internal compliance forms that he had not participated in selling away, a violation of firm policy and regulatory rules. In May 2023, when FINRA requested information on investors tied to the company, Navarro initially identified only one customer. He disclosed the remaining four after follow-up inquiries.
Further, between 2019 and 2022, while at IFG, Navarro borrowed $80,000 from two clients through his tax preparation business. Although he had firm approval to operate the business, he did not obtain prior written consent for those personal loans, later repaying them with interest. FINRA found that Navarro falsely attested on compliance documents that he neither solicited nor accepted loans from clients.
Navarro, a 30-year industry veteran, remains registered as an investment adviser through Newbridge Financial Services Group, according to AdvisorHub.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra
