GRAND RAPIDS, Mich. (WOOD) — A West Michigan stockbroker who was fired for taking a loan from a client can no longer work as an investment adviser.
Jaime Westenbarger agreed to give up his broker’s license permanently as a result of disciplinary action taken by the agency that regulates the investment industry.
The Financial Industry Regulatory Authority approved the settlement agreement Oct. 8, nearly two weeks after Target 8 broke allegations against Westenbarger, 42, the founder of Forest Hills Financial.
Westenbarger admitted violating the regulations of Securities America, Inc., the brokerage firm he was registered through, when he took a loan from a client.
The client’s attorney told Target 8 that the $60,000 in question was supposed to be an investment through Forest Hills Financial, not a personal loan to Westenbarger.
Westenbarger told Target 8 that the client agreed to loan him the money, which he said he intended to use to buy real estate. He also said he planned to repay the client with 6% interest but admitted he instead used the money for living and funeral expenses when his wife died in 2018.
According to a document posted on the website that tracks disclosures and disciplinary actions against brokers, Westenbarger also failed to turn over records sought by regulators investigating the alleged loan.
“Without admitting or denying the findings, Westenbarger consented to the sanction and to the entry of findings that he failed to provide documents requested by FINRA during the course of an investigation,” regulators described in the “allegations” portion of the online record. “The finding states that Westenbarger intentionally provided a partial response but did not substantially comply with all aspects of FINRA’s request. The form submitted by the firm disclosed that his termination was for a violation of firm policies and procedures regarding borrowing funds from clients.”
Nebraska-based Securities America, Inc, terminated Westenbarger in August.
According to the settlement agreement, under which the Ada man gives up his broker’s license, regulators cannot bring additional enforcement action based on the same findings.
FINRA’s regulatory powers are solely civil in nature.
The U.S. Securities and Exchange Commission has declined to confirm or deny the existence of a criminal investigation.
Meanwhile, Forest Hills Financial is in the process of dissolving. Bart Steindler, a minority stakeholder in FHF, told Target 8 that he broke off from the firm as soon as he became aware of the investigation into Westenbarger’s activities.
Steindler said Securities America has reached out to all impacted clients, but former customers can also contact him through Forest Hills Financials’ old number, 616.949.6006, if they have additional questions or concerns.
Steindler has started a new company with two other financial advisors.
Target 8 tried to reach Westenbarger for comment, but he did not respond.