FINRA has sanctioned a broker for allegedly accepting two loans totaling $70,000 from a customer, according to his recent settlement with FINRA.
Patrick Jermaine Phillips accepted the loans in defiance of industry rules while employed at Robert W. Baird in Chicago, the regulator said. He allegedly withdrew the funds from the customer’s checking account held at a third-party bank in August 2009 and December 2009.
FINRA also faulted Phillips for using his personal email account to correspond with both the customer and her son when he later moved to Citigroup Global Markets. In violation of Citi’s written supervisory procedures, Phillips communicated with the customer about the status of her accounts, the receipt of quarterly performance reports and periodic account meetings via personal email, FINRA claimed.
He also allegedly used the e-mail account to correspond with the customer’s son concerning his continued failure to repay the outstanding loans.
Citi’s policies prohibited brokers from using personal email accounts for business purposes, according to FINRA.
“In doing so, Phillips prevented [Citi] from preserving the emails as required by recordkeeping rules and prevented [Citi] from discovering emails relating to the customer loan,” FINRA said.
The regulator also chided Phillips for falsely attesting on his annual compliance certifications with Citi that he had not borrowed money from a current or former client.
Phillips did not respond to phone and email messages seeking comment. He agreed to a five-month suspension and $10,000 fine without admitting or denying FINRA’s allegations.
Phillips worked for Baird from December 2006 to August 2010 and for Citigroup from August 2013 to July 2016, according to FINRA. He was voluntarily terminated from MSI Financial Services in December 2016, after working there for five months, FINRA said.
Neither Baird nor Citigroup responded to an email seeking comment on the sanctions imposed on their former employee.
Baird paid the customer $45,000 to settle the complaint she filed in June 2017, FINRA said.