In July 2019, the Financial Industry Regulatory Authority (FINRA), suspended Linda Zara (a/k/a Linda Zaramontoya) (CRD# 2322009) of Summit Brokerage Services, Inc. in Boca Raton for “borrow[ing] $44,292 from a 94 year old member firm customer without providing prior notice to, or obtaining prior written approval from her firm.” The conduct occurred while Zara was employed by Wells Fargo Clearing Services, LLC.
According to Zara’s Letter of Acceptance, Waiver and Consent (AWC), published by FINRA, Zara consented to findings that Zara and a customer executed a promissory note which provided that Zara could borrow up to $50,000 at 2% interest with a client who was 94 years old. The AWC states that Zara borrowed $44,292 to pay personal credit card bills. FINRA stated that this constituted a violation of FINRA Rules 3240 and 2010.
FINRA Prohibits Borrowing From A Customer
FINRA Rule 3240, titled “Borrowing From or Lending to Customers,” prohibits brokers from borrowing or lending money to customers unless (1) permitted by the firm (and written firm procedures are followed) and (2) the arrangement falls under certain other exceptions specified by FINRA. The transaction Zara engaged in did not satisfy her firm’s or FINRA’s criteria.
FINRA Rule 2010 additionally requires brokers to “observe high standards of commercial honor and just and equitable principles of trade.” FINRA found Zara’s conduct in this case to be a violation of Rule 2010.
These rules are designed to protect investors—particularly those who are elderly or vulnerable—from being taken advantage of in the form of loan arrangements designed solely to benefit the broker. For violating these Rules, Zara was suspended 3 months and fined $5,000. Additionally, Zara was discharged from her position at Wells Fargo because of this loan arrangement.
Previous Customer Disputes
Zara’s CRD Report, published by FINRA, also indicates that in 2015, Zara settled a customer dispute for $52,500 that arose out of allegations of misrepresentation, breach of fiduciary duty, violation of Florida law, and violation of FINRA Rules concerning the suitability of an insurance policy. Zara was employed by Citigroup Global Markets Inc. at the time.
Did You Lose Money Investing With Linda Zara And/Or Are You The Victim Of Elder Financial Fraud?
Stockbrokers and financial advisors clearly have great insight into a customer’s financial situation. In Florida and nationwide where there is a large senior citizen community, elder financial abuse is a growing problem. A financial advisor owes a customer certain fiduciary duties and should never borrow money from a customer.
Silver Law Group represents investors nationwide in claims of unsuitable recommendations, misrepresentations, breach of fiduciary duty, and more. Silver Law Group also represents investors who were victims of prohibited broker transactions similar to the loan arrangement discussed above. If you or someone you know lost money investing with Linda Sue Zara of Summit Brokerage Services, please contact the Silver Law Group toll free at (800)-975-4345 or email firstname.lastname@example.org for a confidential consultation.