John Eads: Titusville Broker Suspended Over Customer Info Use
John Eads (CRD# 2764843), an investment professional previously registered with AXA Advisors and Lion Street Financial, has been sanctioned by the Financial Industry Regulatory Authority in connection to allegations he improperly used nonpublic customer information. Formerly registered with both firms’ offices in Titusville, Florida, Eads was issued a three-month suspension and a fine of $15,000.
According to a Letter of Acceptance, Waiver and Consent (No. 2018057322601) dated October 2019, John Eads was registered with AXA Advisors from November 2009 until November 2017, when he became associated with Lion Street Financial, where he remained until the firm filed notice of his termination in February 2018. According to FINRA, when he left AXA Advisors for his new firm, “he failed to return hard copies of AXA’s completed new customer forms and kept them for use at Lion Street, without AXA’s or the customers’ knowledge or consent.” These forms contained nonpublic personal information, according to FINRA, such as social security numbers, driver’s license numbers, and dates of birth, which he allegedly “instructed his sales assistant to use” so as to fill out “206 change of broker/dealer requests to transfer the customer accounts to Lion Street.” FINRA’s findings go on to state that he used his personal email account, and additionally instructed his sales assistant to use another personal email account which he maintained, to send the completed forms to his customers, although neither account made use of encryption to protect the customers’ nonpublic personally identifying information information.
The AWC Letter states that “at least one customer who did not wish to have her account moved to Lion Street complained after discovering a change of broker/dealer form had been filed on her behalf without her knowledge or consent.” According to FINRA, this conduct constituted violations of Regulation S-P, which concerns the use of nonpublic personal information, and FINRA Rule 2010, which concerns standards of commercial honor. As a result of the foregoing alleged conduct, John Eads was suspended from association with any FINRA member firm in any and all capacities for a period of three months. He was also ordered to pay a fine of $15,000.
John Eads is currently not registered with any FINRA member firm. His previous registrations include Lion Street Financial, AXA Advisors, and Woodbury Financial Services, all in Titusville, Florida. He has passed three securities industry qualifying examinations and currently holds no state securities licenses. (Information current as of April 20, 2020.)