The Financial Industry Regulatory Authority issued a five-month suspension and $10,000 fine against broker Patrick Jermaine Phillips for borrowing funds from a client and using his personal email account for business purposes.
Phillips, who joined the securities industry in 2000, has been associated with multiple broker-dealers, including Robert W. Baird & Co., Citigroup Global Markets, Ameriprise, and most recently MSI Financial Services. He holds FINRA Series 7, 63, 66 and 31 licenses.
In April and December 2009 while associated with Baird, Phillips accepted two loans from a customer totaling $70,000. Baird’s written supervisory procedures explicitly state that financial advisors may not, under any circumstances, borrow money and/or securities from clients.
The borrowed funds were withdrawn from the client’s checking account held at a third-party bank, and Baird claims that Phillips never disclosed the loans or repaid them. According to Phillips’ Brokercheck profile, Baird reportedly paid the client $45,000 to settle a complaint that was filed in June 2017.
Phillips eventually moved the client’s securities account to Citigroup, and against Citigroup policy, allegedly used his personal email account for business purposes and to correspond about his continued failure to repay the outstanding loans.
FINRA claims that Phillips completed two annual compliance certifications at Citigroup attesting that he had provided his supervisor with copies of all communications for pre-approval, and indicating that he had not borrowed money from any current or former client.
Phillips has not been associated with any broker-dealer since his termination from MSI and had no prior disciplinary history in the securities industry. He agreed to FINRA’s terms without admitting or denying the findings.