FINRA has sanctioned former Commonwealth Financial Network representative Kevin J. Nainiger for improperly reporting a loan that he obtained from a client.
Nainiger has been a registered representative since 1994 and was employed by Commonwealth from August 2006 until April 2012. Preceding the most recent sanctions, Nainiger had never been the subject of any FINRA disciplinary cases.
In July 2010, Nainiger’s wholly-owned limited liability company, N.R.E. Group, bought a building from a couple who were clients of Nainiger’s at Commonwealth. As part of an agreement between the clients and Nainiger, the building was purchased using a loan provided by the couple. The $140,000 loan was issued to Nainiger through N.R.E., with Nainiger issuing the clients a promissory note. Currently, Nainiger has made all necessary loan payments.
FINRA alleges that Nainiger did not acquire Commonwealth’s consent before obtaining the loan from his clients. Furthermore, he never reported the loan to Commonwealth, and failed to specify that he had obtained it on a compliance form dating back to November 2010.
Allegedly failing to report the loan violated Commonwealth policy, which, during Nainiger’s employment stated that representatives were not allowed to lend money to, or borrow money from, a customer unless the customer and representative had a preexisting business relationship. If this was not the case, the representative was required to acquire Commonwealth’s approval before undertaking the transaction.
As this was the case, Nainiger’s alleged violation of Commonwealth’s procedures also constituted a violation of FINRA Rules 3240. Therefore, FINRA has fined Nainiger $5,000 and suspended him from associating with any FINRA member in any capacity for 30 business days.
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