John Terzis allegedly borrowed $200,000 from a 69-year-old client who was in ill health without notifying his employer, LPL Financial. The firm had a written policy in place regarding broker-client loans. He assisted the client in transferring funds from her brokerage account to her checking account. He provided a ten-year promissory note in exchange in December of 2019.
Additionally, in a compliance questionnaire from October 2020, Terzis answered that he had not solicited loan funds from any clients, nor had he issued or participated in any promissory notes outside of the firm.
When he initiated the promissory note, Terzis did not have the capacity nor the reasonable expectation to repay the loan in full under his financial circumstances at that time. From February 2020 through December 2021, Terzis made regular payments to the client, but then ceased. The client then complained to the firm through her attorney, filing a customer dispute on December 16, 2021, alleging misappropriation of funds for $200,000.
LPL Financial terminated Terzis’ employment on February 15, 2022, and submitted a Form U5 to FINRA. From there, FINRA began its investigation into Terzis’ unauthorized loan. FINRA found that Terzis did not seek or obtain approval for the loan as required by the firm’s written instructions.
Terzis signed an Acceptance, Waiver & Consent Letter (AWC), neither confirming nor denying the allegations. In it, Terzis agreed to FINRA’s sanctions of being permanently barred from any association with FINRA members, effective 12/23/2022.
Did You Invest With John Nicholas Terzis?
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