The Financial Industry Regulatory Authority has barred former Georgia-based LPL broker Eric Hollifield, after the registered representative failed to cooperate or provide information to the regulator as it investigated a client allegation that Hollifield stole more than $1 million.
Finra said it launched an investigation into Hollifield, who was a registered rep of LPL Financial and subsequently Hamilton Investment Counsel, in connection with an arbitration claim filed by an elderly client who alleges Hollifield misappropriated $1,240,000.
LPL terminated Hollifield on September 10 for “failing to disclose an outside business activity.” On September 1, 2021, Hamilton Investment Counsel followed LPL’s lead and terminated Hollifield for the same reason.
Since Hollifield failed to respond to Finra’s request for information, which is required by Finra Rule 8210, Hollifield was hit with a lifetime bar from the securities industry.
“Brokers agree to these lifetime bans, instead of cooperating with an investigation, for any number of reasons,” said Joe Wojciechowski, a veteran investor advocate attorney with Stoltmann Law Offices, in an interview with Financial Advisor.
“Given Finra’s ongoing investigation into the allegations made in the pending customer complaint and the terminations from LPL and Hamilton, a reasonable conclusion to draw is Hollifield chose to accept a lifetime ban from Finra as opposed to disclosing or admitting information to Finra that could be used against him by criminal authorities,” Wojciechowski said.
He noted that facts in the customer complaint and the information contained in the Finra filing are mere allegations and nothing has been proved.
Hollifield could not be reached for comment.
LPL did not immediately respond to a request for comment.
Wojciechowski said that BrokerCheck, an online tool investors can use to check the disciplinary history of reps and their firms, becomes less meaningful for investors if firms use opaque or inside baseball terms like “failing to disclose an outside business activity” to describe the reason reps are terminated.