Broker Roy Williams Barred After Borrowing From Customers

Roy Williams (Roy Kevin Williams CRD# 843607) is a former registered broker and investment advisor last employed with Stifel, Nicolaus & Company, Incorporated (CRD# 793) of Indianapolis, IN. He was previously employed with Morgan Stanley Smith Barney (CRD# 149777) and Citigroup Global Markets Inc. (CRD# 7059), also of Indianapolis, and Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD# 7691). He has been in the industry since 1977.

On June 5, 2023, a customer filed a dispute alleging that Williams convinced them to “make personal loans to him from 2019 through 2021. The client requested damages of $59,000, and the dispute was settled for the same amount.

Stifel Nicolaus discharged Williams on 5/12/2023 after he obtained loans from customers from 2019 through 2023. He had not disclosed these loans during those years on his annual compliance questionnaires as required. The firm issued a Uniform Termination Notice for Securities Industry Registration (Form U5) for Williams with the undisclosed loans as the reason for his discharge.

Following the Form U5 from Stifel Nicolaus on May 16, 2024, FINRA began an investigation and requested that Williams appear for on-the-record testimony in the matter. Although Williams began cooperating with FINRA staff, he stopped. FINRA sent a request to Williams on August 7, 2024, requesting he appear for on-the-record testimony. On August 13, 2024, he declined to do so in a phone call with FINRA staff. This refusal violates FINRA Rules 8210 and 2010.

In a Letter of Acceptance, Waiver & Consent (AWC), FINRA imposed a sanction of a permanent bar from any association with any member in any capacity. Williams signed the letter on August 20, 2024, and FINRA legal counsel signed it on September 5, 2024.

Why Is Lending Money To My Broker A Bad Idea?

Unless your stockbroker is also a relative or a longtime friend, consider carefully before agreeing to a personal loan. Lending money to your stockbroker has the potential for serious legal consequences:

• Regulatory violations: FINRA Rule 3240 governs loans between stockbrokers and customers. If the loan doesn’t meet specific criteria or isn’t approved by the brokerage firm, both parties could face regulatory action.
• Fines and penalties: Regulators can impose steep fines on brokers who fail to disclose loans from customers. For example, a stockbroker was fined $45,000 by the Tennessee Securities Division for not disclosing three loans from clients.
• Legal disputes: If the broker fails to repay the loan, the lender may need to pursue legal action to recover the funds, leading to expensive, long-term litigation.
• Securities law violations: Depending on the nature of the loan, it could be considered a securities transaction, potentially violating securities laws if not properly structured and disclosed.

FINRA Arbitration Claims Against Brokers Who “Borrow” Money From Clients

Silver Law Group routinely represents investors who loan money to an advisor in violation of FINRA rules and regulations. A financial advisor should never ask a client for a loan, borrow money, ask a client to invest in a personal venture or seek to be part of a client’s estate. Unfortunately, we have seen a rise in these types of cases as elder fraud has become a major problem in this country.  Our attorneys are currently pursuing claims against several large banks for failing to properly supervise its employees who directly or indirectly play a role in elder fraud scams.  If your financial advisor improperly took money from you, we may be able to help you recover your losses.

Did You Invest With Roy Kevin Williams? 

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.