As a financial analyst and legal expert with over a decade of experience, I’ve seen my fair share of misconduct cases in the finance industry. The recent allegations against Jeffrey Thomas Higgins, a former registered broker and investment advisor, are particularly serious and concerning for investors.
According to FINRA records, in July 2024, Higgins consented to findings that he refused to produce information and documents, and appear for on-the-record testimony requested by FINRA during an examination following a regulatory tip. The findings stated that Higgins’ member firm filed a Form U5 indicating he was discharged based on his admission to misdirecting client investments and funds and misappropriating them for his own use, starting at his prior broker-dealer firm and continuing through his termination date.
The seriousness of these allegations cannot be overstated. Misappropriation of client funds is a grave violation of trust and fiduciary duty that can have devastating consequences for investors. It undermines the very foundation of the client-advisor relationship and erodes confidence in the financial industry as a whole.
Higgins’ alleged misconduct dates back to approximately 2007 at his prior firm, Financial West Group (which FINRA expelled in 2020), and continued during his time at Western International Securities, Inc. The longevity and persistence of this behavior, if proven true, is deeply troubling.
For investors, cases like this serve as a stark reminder of the importance of vigilance and due diligence when entrusting their hard-earned money to financial professionals. It’s crucial to thoroughly research an advisor’s background, including their employment history, regulatory disclosures, and any past complaints or disciplinary actions.
In addition to the July 2024 FINRA action, which resulted in Higgins being barred from associating with any FINRA member in all capacities, he has two other disclosures on his record:
- June 2024 – Discharged by Western International Securities amid allegations of misdirecting and misappropriating client funds
- June 2023 – Customer dispute settled for $94,211 involving allegations of unsuitable recommendations, misrepresentations, and omission of material facts
These red flags paint a troubling picture of Higgins’ conduct as a financial advisor. As the famous quote goes, “It takes 20 years to build a reputation and five minutes to ruin it.” Cases like this underscore the fragility of trust in the financial industry and the devastating impact of its breach.
It’s worth noting that FINRA Rule 2150 explicitly prohibits the improper use of a customer’s securities or funds by any member or associated person. This includes any “guarantee” brokers make to customers regarding losses in a brokerage account. Additionally, FINRA Rule 3240 strictly prohibits borrowing money from clients, barring unique circumstances like familial relationships, to avoid conflicts of interest and potential theft or conversion of client assets.
The consequences of violating these rules and engaging in misconduct are severe, as evidenced by Higgins’ bar from the industry. However, the true cost is borne by the investors who placed their trust and life savings in the hands of an unethical advisor. A sobering statistic: 1 in 20 advisors has a history of misconduct, underscoring the need for constant vigilance.
As an industry professional, my role is to help investors navigate these challenges, protect their interests, and seek recourse when wrongdoing occurs. By sharing insights, advocating for transparency, and working to hold bad actors accountable, we can strive to create a more trustworthy and secure financial landscape for all.
