Raymond Schmidt, a former stockbroker employed by LPL Financial, was barred from future employment in the financial industry. The Financial Industry Regulatory Authority (FINRA) claims he borrowed $2.25 million from his customers. Although borrowing money from clients is not illegal, it is frowned upon and most brokerage firms don’t let employees do it. Schmidt ran afoul of the law when he borrowed money without telling his firm. He also broke the law when he lied on compliance questionnaires asking about private transactions with customers.
Mr. Schmidt was based in Oceanside, California. Regulators say that his client’s money used to construct a luxury residence in Hawaii.
FINRA has not accused Schmidt of stealing the money or defaulting on the loans. We are aware of one pending complaint him by a customer seeking $375,000 and alleging “elder abuse.” Published reports also say that he refused to cooperate with regulators.
Mr. Schmidt agreed to the ban without admitting or denying the findings.
Brokers that borrow from customers have a much higher risk of being compliance risks. Refusing to cooperate with regulators is even a bigger red flag.
Luckily for customers, the brokerage firms can often be held responsible for the private or outside conduct of their employees. That means LPL Financial could be stuck repaying the $2.25 million if Schmidt defaults on loans.
If you feel that a stockbroker defrauded you or if a stockbroker owes you money, give us a call. Even if you believe the stockbroker has no assets, we may be able to help. Most cases can be handled on a success or contingent fee basis meaning no legal fees are due unless we recovery money for you.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are kept strictly confidential.
MahanyLaw – America’s Fraud Lawyers