← Broker database 2026-01-26
Lyhen Fiallo Barred by FINRA for Refusing Investigation into Customer Borrowing
According to FINRA, Lyhen Fiallo was permanently barred from association with any FINRA member firm in January 2026, after refusing to provide documents and information requested by FINRA as part of an investigation into her potential involvement with borrowing from a securities customer.FINRA rules strictly limit the circumstances under which registered representatives may borrow money from customers. Under FINRA Rule 3240, borrowing from a customer is generally prohibited unless the customer is an immediate family member, a financial institution in the business of lending money, or the customer's employer—and even in those cases, borrowing is typically subject to firm approval and disclosure requirements. When a registered representative borrows from a customer outside these permitted circumstances, it creates a serious conflict of interest and can directly harm the customer financially.Rather than cooperating with FINRA's investigation into whether she borrowed from a customer in violation of these rules, Fiallo refused to provide the documents and information FINRA requested. Under FINRA Rule 8210, all registered persons are required to respond to FINRA's information requests as part of its regulatory oversight function. Refusal to cooperate with a Rule 8210 request is itself a violation of FINRA rules and typically results in a permanent bar from the securities industry—which is the sanction imposed here.For investors, this case is a reminder to be cautious if a broker ever asks to borrow money from you. Such requests should immediately be reported to the firm's compliance department. Investor funds and personal relationships with brokers should be kept entirely separate—any blurring of that line is a significant red flag. Investors can check whether a broker has any prior disciplinary history, complaints, or terminations on FINRA BrokerCheck before and during any professional relationship.