According to FINRA, Jacob Lee Harper was fined $17,500 and suspended from association with any FINRA member in all capacities for 22 months for borrowing $50,000 from customers without firm approval, providing false responses to FINRA, establishing undisclosed outside securities accounts, and making false compliance certifications.
The findings revealed multiple serious violations beginning with prohibited borrowing. Harper borrowed $50,000 from two customers who were also friends, without seeking or obtaining prior written approval from his member firm. The customers were neither members of his immediate family nor lending-related financial institutions—the only categories generally permitted for borrowing arrangements. The loans, obtained partly to support Harper's outside business activity, were not documented in writing and had no specified duration, repayment schedule, or interest rate. Despite the informal nature of these arrangements, Harper has returned only $3,000 to one customer and has made no other principal or interest payments.
After obtaining the loans, Harper completed a firm compliance certification falsely stating that he did not have borrowing or lending arrangements with customers outside the permitted categories. This false certification concealed the loans from the firm's supervision.
Harper's misconduct escalated when he provided false and misleading responses to FINRA's investigation. Initially, Harper submitted a written response falsely claiming that the first customer had paid him for a vehicle sale, omitting any reference to money borrowed from the second customer. In response to a subsequent request, Harper submitted another response containing multiple false statements about the alleged vehicle transaction. Ultimately, Harper admitted that no vehicle transaction occurred and that the money was a loan, also disclosing for the first time the loan from the second customer.
Additionally, Harper established three outside securities accounts in his fiancée's name at another member firm without obtaining prior written consent from his firms. Harper partially funded these accounts and placed over 1,000 trades, including in two securities on his firm's restricted list. He had a beneficial interest in the accounts, which he used for personal financial transactions including a $3,000 partial loan repayment. Harper completed firm compliance certifications falsely stating that his list of outside securities accounts was complete, when it omitted these accounts.
The 22-month suspension, in effect from December 1, 2025, through September 30, 2027, along with the $17,500 fine, reflects the cumulative seriousness of Harper's multiple violations, particularly his false statements to FINRA and repeated false compliance certifications.
Investors should be cautious about lending money to their financial professionals and should verify through FINRA BrokerCheck whether representatives have disclosed all outside securities accounts and business activities.
