If you held a brokerage account with Jacob Lee Harper at D.A. Davidson & Co. or LPL Financial, LLC between 2024 and 2025, you should know that FINRA found that Harper borrowed $50,000 from two customers without seeking or obtaining his firm’s prior written approval, provided false and misleading information to FINRA investigators, and maintained unauthorized outside securities accounts. FINRA suspended Harper for 22 months and assessed a deferred fine of $17,500.
Jacob Lee Harper (CRD# 4258319) is not currently registered with any FINRA member firm. According to BrokerCheck, Harper was registered with D.A. Davidson & Co. in Newport Beach, California, from September 2023 through March 2025, and subsequently with LPL Financial, LLC in Laguna Niguel, California, from March 2025 until October 2025.
Findings
Without admitting or denying the findings, Harper consented to sanctions and to the entry of findings that he borrowed $50,000 from two customers without seeking or obtaining prior written approval from his member firm, initially provided false, misleading, and incomplete responses to FINRA regarding those loans, and partially funded and effected trades in three securities accounts at another member firm without obtaining prior written consent from his firms.
Borrowing from Customers Without Firm Approval
According to the AWC, in November 2024, Harper borrowed a total of $20,000 from Customer A, a friend and customer who was neither a member of Harper’s immediate family nor a lending-related financial institution. According to the AWC, in January 2025, Harper borrowed a total of $30,000 from Customer B, another friend and customer who similarly was neither a member of Harper’s immediate family nor a lending-related financial institution. According to the AWC, the loans, which were obtained in part to support Harper’s outside business activity, were not documented in writing and had no specified duration, repayment schedule, or interest rate; Harper did not notify D.A. Davidson or seek the firm’s prior approval of either loan.
According to the AWC, in March 2025, Harper returned $3,000 to Customer A; to date, Harper has not made any other principal or interest payments to Customer A or Customer B. According to the AWC, after obtaining the loans from Customers A and B, Harper completed a D.A. Davidson compliance certification that falsely stated that he did not have a borrowing or lending arrangement with a customer who was not a member of his immediate family or a financial institution in the business of financing.
Providing False Information to FINRA
According to the AWC, in April 2025, in connection with an examination, FINRA issued a request to Harper pursuant to FINRA Rule 8210 to identify all items of value that were gifted, loaned, transferred, paid, or otherwise provided to him by any of his brokerage customers; Harper submitted a written response to FINRA falsely stating that Customer A had paid him for a vehicle that he sold to Customer A, and Harper’s response omitted any reference to the money he borrowed from Customer B.
According to the AWC, later in April 2025, FINRA issued another Rule 8210 request for documents and information relating to the purported vehicle sale; in May 2025, Harper submitted a written response to FINRA containing multiple false statements relating to the claimed vehicle transaction about events and discussions that never occurred. According to the AWC, in June 2025, Harper submitted a written response to FINRA admitting that no vehicle transaction had occurred with Customer A and that the $20,000 received from Customer A in November 2024 was a loan; Harper also disclosed for the first time the loan he received from Customer B.
Unauthorized Outside Securities Accounts
According to the AWC, from May 2024 to December 2024, Harper partially funded three brokerage accounts held in his fiancée’s name at another FINRA member firm. According to the AWC, Harper materially contributed to his fiancée’s financial support, including through the loans he obtained from Customers A and B, which were obtained partly to provide financial support to their joint business; Harper had control over the Outside Accounts. According to the AWC, from May 2024 through May 2025, Harper placed over 1,000 trades in the Outside Accounts, including in two securities on D.A. Davidson’s restricted list.
According to the AWC, Harper failed to disclose the Outside Accounts to or obtain prior written consent from D.A. Davidson; in January 2025, Harper completed a D.A. Davidson compliance certification that falsely stated that his list of outside securities accounts was complete and accurate, when the list did not include the Outside Accounts. According to the AWC, when Harper joined LPL Financial in March 2025, he failed to disclose the Outside Accounts or obtain the firm’s written consent within 30 days, and completed a compliance questionnaire for LPL Financial in which he falsely stated that there were no outside securities accounts in which he had a beneficial interest; Harper belatedly disclosed the Outside Accounts to LPL Financial in July 2025.
Background
FINRA Rule 3240 governs borrowing and lending arrangements between registered representatives and their customers. The rule recognizes that these arrangements create conflicts of interest that can compromise a broker’s objectivity. A broker who owes money to a customer may be reluctant to give advice that could harm that customer’s financial position, or may continue managing an account beyond what is in the customer’s interest in order to maintain the relationship and avoid demands for repayment. To manage this risk, the rule requires that any permissible borrowing arrangement receive prior written approval from the firm before it is entered into, giving the firm the opportunity to evaluate and monitor any conflict.
FINRA Rule 3210 requires associated persons to obtain prior written consent from their member firm before opening or maintaining a securities account at another firm in which the associated person has a beneficial interest. Under the rule, a person is presumed to have a beneficial interest in any account they control or whose holder they materially support financially. The purpose of the rule is to allow member firms to monitor the personal trading activity of their registered representatives for potential conflicts of interest, including trades in securities the firm has placed on a restricted list.
FINRA Rule 8210 requires associated persons to cooperate fully and truthfully with FINRA examinations and investigations. A representative who responds to a regulatory inquiry with a fabricated cover story, and who then elaborates on that story when pressed with follow-up requests, does not merely fail to cooperate; he actively impedes the investigation.
FINRA Rule 2010 (standards of commercial honor): Each of the above violations also constitutes a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
According to the AWC, during the relevant period, D.A. Davidson’s procedures generally prohibited its representatives from borrowing from customers unless the loan was from an immediate family member, a financial institution in the business of providing credit, another registered employee of the firm, someone with whom the representative had a personal relationship from which the lending arrangement arose, or someone having a business relationship with the representative outside the brokerage relationship; except for loans from an immediate family member or a financial institution, D.A. Davidson’s procedures required prior approval of any loan.
FINRA Rule 12206 governs eligibility for arbitration claims. Investors considering a claim should consult with a securities arbitration attorney to evaluate whether their situation falls within the applicable timeframe.
Warning Signs
Some red flags that brokerage customers should watch for include: your broker has asked to borrow money from you, regardless of how the request is framed; any loan to your broker lacks a written agreement, a fixed repayment schedule, or a stated interest rate; your broker borrowed money from you and has not made repayments on any agreed schedule; you later learn that your broker was actively trading personal or affiliated accounts while managing your account; and your broker completed firm compliance certifications or questionnaires that you later learn contained false statements about outside accounts or lending arrangements.
If any of these patterns apply to your account, a free consultation with a securities law attorney can help you understand whether you have a potential claim for damages.
Sanctions
According to the AWC, Harper was suspended from associating with any FINRA member in all capacities for 22 months. According to BrokerCheck, the suspension is in effect from December 1, 2025, through September 30, 2027. According to the AWC, Harper was also assessed a fine of $17,500; the fine is deferred and due and payable either immediately upon reassociation with a member firm or prior to any application or request for relief from any statutory disqualification, whichever is earlier.
Steps to Take Right Now
- Gather your account statements, trade confirmations, and any correspondence with your broker or firm, including emails, texts, and written materials about the investments.
- Look up your broker on FINRA BrokerCheck at brokercheck.finra.org to review their full disclosure record.
- Contact a securities arbitration attorney for a consultation to evaluate your options.
If you held a brokerage account with Jacob Lee Harper at D.A. Davidson & Co. or LPL Financial and experienced similar conduct, contact Rosenberger + Kawabata to discuss your options. Rosenberger + Kawabata represents retail investors in FINRA arbitration proceedings involving broker borrowing violations, unauthorized outside securities accounts, and related misconduct. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.
Sources
The information in this post comes from FINRA’s public records and BrokerCheck database. You can view the full detailed report (CRD# 4258319) here.
You can view the full January 2026 FINRA disciplinary actions report here.