SEC Bars LPL Stockbroker Charged With Theft of Customer Funds
Dain F. Stokes of Bedford, New Hampshire was a registered representative of LPL Financial, LLC. Stokes is 60 years old and resides in Fremont, New Hampshire, where he also has his own LPL Financial independent office. According to FINRA Public Disclosure, In addition to being a registered representative, Stokes also spends time writing fictional novels.
One such story, based upon the New Hampshire Bureau of Securities Regulation, is that between 2018 and 2019, Stokes obtained $576,000 from his customers by telling them that these fungs would be invested in Africa, in a lucrative investment project where they would earned a 20% return in three months. However, Stokes did not use the money for any African or other investment, but instead stole or misappropriated these funds for personal expenses and sending money to “various people and entities all over the United States.”
In the normal progression of events, on August 26, 2019, the New Hampshire Bureau of Securities Regulation suspended Stokes’s securities license and permanently barred him from New Hampshire. On August 28, 2019, or two days later, LPL terminates Stokes based upon the New Hampshire state action.
Based upon the information provided by LPL in connection with his termination, in September 2019, FINRA decides to investigate this matter by requesting documents and an on the record interview or OTR with Stokes, but after three letters go unanswered on September 27, 2019 and October 21, 2019, and December 30, 2019, on December 30, 2019, FINRA decides to also bar Stokes under Rule 8210 for failure to cooperate with FINRA’s inquiry.
Months later, on March 18, 2020, one of Stokes’ customers filed a complaint with LPL Financial. Stokes was found to have stolen $576,000 from three of his customers. However, LPL Financial told FINRA and state securities regulators that it does not know the amount the customer seeks, but estimates that it is more than $5,000. This one case, or claim, as of June 25, 2020, is still “pending.”
On June 25, 2020, the United States Securities and Exchange Commission entered an Order pursuant to Section 15(b)(6) of the Exchange Act permanently barring Stokes from registration and Section 15(b)(6) of the Exchange Act.
LPL Financial is likely to contend that it is not responsible for Stoke’s conduct because it never authorized him to steal from his customers. These customers may be best advised to hire a lawyer.