According to FINRA, Lickhai Quach was barred from association with any FINRA member in all capacities on August 7, 2023.
FINRA found that Quach refused to provide documents and information requested by FINRA in connection with its investigation of the circumstances surrounding his termination from his member firm. The firm filed a Form U5 stating that Quach was permitted to resign while under review by the firm for violating firm policy related to borrowing funds from a client.
Borrowing funds from clients is a serious compliance violation that raises significant investor protection concerns. When registered representatives borrow money from clients, it creates conflicts of interest and potential for abuse of the trust relationship. FINRA rules generally prohibit borrowing from customers unless specific conditions are met, such as when the customer is a family member or financial institution in the business of lending.
When a firm reports on a Form U5 that a registered representative was permitted to resign while under review for alleged misconduct, FINRA typically conducts an investigation to determine whether securities rules were violated and whether the individual poses a risk to investors. For these investigations to be effective, registered persons must cooperate by providing requested information and documents.
Quach's refusal to provide information prevented FINRA from fully investigating the alleged borrowing from a client and determining whether violations occurred. This refusal to cooperate is itself a serious violation because it obstructs FINRA's ability to protect investors and maintain the integrity of the securities markets.
When a registered person refuses to cooperate with a FINRA investigation, the typical sanction is a bar from the securities industry. This sanction is appropriate because someone who refuses to cooperate with regulatory oversight poses an unacceptable risk to investors and demonstrates a lack of respect for regulatory authority.
A bar prohibits an individual from working for any FINRA member firm in any capacity. This means Quach cannot work as a registered representative, principal, or in any other role at a broker-dealer. The bar protects investors by ensuring that individuals who obstruct regulatory investigations cannot continue to work in the industry.
Investors should be cautious about lending money to their financial advisors or entering into financial arrangements beyond the normal broker-customer relationship. Such arrangements create conflicts of interest and put investors at risk. Investors can check the background of their financial professionals, including any disciplinary actions, through FINRA's BrokerCheck system.
