Whitehurst improperly borrowed funds from customers at his member firm. He borrowed a total of approximately $15,000 from a customer. The borrowings were unsecured and the loan terms were not memorialized in writing; to date, Whitehurst has only repaid $10,000 to the customer.
When these borrowings occurred, Whitehurst’s firm prohibited its representatives from borrowing from customers. Whitehurst did not obtain the firm’s approval to borrow money from the customer and did not disclose to his firm that he had borrowed money from her.
Whitehurst borrowed a total of approximately $10,000 from another customer and has repaid the loans.
When these borrowings occurred, the firm’s written policies prohibited borrowing from customers unless the firm approved an exception, but Whitehurst did not obtain his firm’s approval to borrow money from the customer, and did not disclose to it that he had borrowed money from her. In addition, With both customers, the borrowing arrangements did not otherwise meet the conditions set forth in NASD Rule 2370(a)(2). Moreover, FINRA found that Whitehurst provided FINRA with a false written response in regard to an investigation.