A Jefferies rep has been suspended for four months for allegedly borrowing $7.3 million in unreported loans from 16 clients who were also long-time friends, including a billionaire, a Nobel Peace Prize winner and a former CEO of a major financial institution, Finra announced today.

Theodore M. Serure, a former J.P. Morgan Securities rep in New York City, settled the matter without admitting or denying charges that he allegedly borrowed the money. In addition to the suspension, he was ordered to pay a $20,000 fine.

Serure had $1.6 billion in assets under management three years ago, according to Forbes, which ranked him 35th on their “Best-In-State Wealth Advisors in 2019.”

He has been been with Jefferies LLC since being terminated by J.P. Morgan in September 2019, according to BrokerCheck.

The loans were discovered during a regulatory examination, Finra said, adding that none of the affected clients filed complaints with the regulator and that all had been repaid.

“Serure was never indebted to his customers at any time for more than $2 million since he used some of the loan proceeds to pay off earlier customer loans. Serure repaid all of the customer loans, and none of the customers complained,” Finra said in the settlement.

All of the customers from whom Serure allegedly borrowed money between 2012 and 2019  were “wealthy and financially sophisticated,” Finra said. In fact, “Serure had been close friends with each customer for decades, some since childhood,” the regulator said.

Given his personal relationship with each of the customers, however, Finra regulations required Serure to notify his broker-dealer and obtain pre-approval, which he failed to do, Finra said.

Finra rules permit customer loans where “the lending arrangement is based on a personal relationship with the customer, such that the loan would not have been solicited, offered, or given had the customer and the registered person maintained a relationship outside of the broker-customer relationship” as long as the registered rep notifies his broker-dealer and receives written approval before entering into the loan.

Serure was associated as a general securities representative with J.P. Morgan Securities from October 1979 until his involuntary termination in September 2019, according to his BrokerCheck record.

A call made to a phone number listed to Serure was not immediately returned.