Lisa Lastrapes: Former Merrill Lynch Advisor Suspended

A disciplinary action taken by the Financial Industry Regulatory Authority against former Richardson, Texas broker and investment advisor Lisa Lastrapes (CRD# 2739854) suspended her over allegations that she failed to disclose to her former broker-dealer firm, Merrill Lynch, that her adult daughter had been named beneficiary on the IRA account of an elderly client, and that she had been named as the customer’s medical power of attorney. Lastrapes was fined $5,000 and suspended from acting as a broker for two months as a result of these findings.

According to a Letter of Acceptance, Waiver, and Consent (No. 2017055788302) signed in May 2019, Lisa Lastrapes’ “adult daughter was named as the beneficiary of a Firm customer’s IRA account” from November 2016 until December 2017. The findings also state that from August until October 2017, Lastrapes herself was named as the customer’s medical power of attorney. Lastrapes allegedly failed to disclose either of these appointments to the firm, violating FINRA Rule 2010, and additionally participated in an outside business activity for which she allegedly failed to provide her firm with prior written notice, according to FINRA.

FINRA’s findings state specifically that in or around July 2016, Lisa Lastrapes helped a 93-year-old customer open a Merrill Lynch IRA account. In November 2016, the customer named Lastrapes’ daughter as the account’s beneficiary. Lastrapes allegedly submitted the relevant paperwork to the firm without providing notification about her daughter’s beneficiary status. FINRA states further that in August 2017, the customer completed paperwork naming Lastrapes as the customer’s medical power of attorney, for which she also did not provide the firm with notification. FINRA’s findings state that “Lastrapes acted as [the customer’s] MPOA until October 4, 2017, when [the customer’s] granddaughter was appointed by a court” to act as the customer’s temporary guardian, after which Lastrapes’ daughter’s beneficiary status was removed. FINRA’s findings state that these activities violate FINRA Rule 2010, which mandates that associated individuals must “observe high standards of commercial honor and just and equitable principles of trade.” FINRA’s findings also state that these activities violated Merrill Lynch’s contemporaneous written supervisory procedures, which “prohibited the Firm’s registered representatives and their family members from being named as a beneficiary on a customer’s retirement accounts and directed its registered representatives to notify their manager upon learning that they or a family member has been named as a beneficiary to a customer’s account.” FINRA states that the WSPs also prevented representatives from accepting appointment as any person’s health care agents, unless granted an exception by the firm.

FINRA found that Lastrapes also participated in an outside business activity in violation of FINRA Rule 3270 and FINRA Rule 2010, as well as in violation of Merrill Lynch supervisory procedures. Specifically, FINRA’s findings state that Lastrapes “rented a residential property she owned and collected rental payments” on, without seeking approval from her firm or otherwise disclosing these activities. As a result of the foregoing alleged conduct, Lastrapes was issued a two-month suspension from associating with any FINRA member in any capacity, and was ordered to pay a fine of $5,000.

Lisa Lastrapes is not currently registered as a broker. Her employment history includes Merrill Lynch, USAA Financial Advisors, Fidelity Brokerage Services, American Express Financial Advisors, and IDS Life Insurance Company. She has passed six securities industry qualification examinations.