The Financial Industry Regulatory Authority (“FINRA”) has entered an Acceptance Waiver and Consent letter against Cheryl Ann Stallings, formerly of LPL Financial, LLC. According to FINRA’s factual findings, Ms. Stallings inappropriately became power of attorney for and LPL customer, took control of two customers’ bank accounts, became a successor trustee and beneficiary a of customer’s trust, and withheld that information from her employer, in violation of firm policy and FINRA rules.
FINRA found that between May 2014 and December 2016, Ms. Stallings failed to disclose these interests to her firm, which prohibited its registered representatives from acting as trustees without prior firm approval and even then only if there was a family relationship. Likewise, FINRA found that Ms. Stallings had made false statements and misrepresentations to LPL on annual compliance questionnaires.
Upon the customers’ deaths, Ms. Stallings received more than $60,000 from customer bank accounts and $248,000 as a beneficiary of a customer’s estate. She also improperly used approximately $5,300 of a firm customer’s funds in violation of FINRA Rules 2150 and 2010.
FINRA Rule 2150 states that “No member or person associated with a member [firm] shall make improper use of a customer’s securities or funds.” Similarly, FINRA Rule 2010 requires associated persons like Ms. Stallings to “observe high standards of commercial honor and just and equitable principles of trade.” A violation of Rule 2150 is also a violation of Rule 2010.
For her conduct, Ms. Stallings was discharged by LPL in 2017 based on her violations of firm policy. FINRA’s sanctions against Ms. Stallings this month included a lifetime ban from the securities industry. By accepting FINRA’s Acceptance, Waiver, and Consent letter, Ms. Stallings neither admitted nor denied FINRA’s findings but is prohibited from making any public statement denying, or creating the impression, that the findings are without factual basis.
If you or someone you know has lost money as a result of an investment with LPL Financial or Cheryl Ann Stallings, please call the Frankowski Firm at 888.741.7503 or fill out this contact form.