According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Patrick Thayer (Thayer), previously associated with LPL Financial LLC, has at least one disclosable event. These events include one regulatory event, alleging that Thayer recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on November 01, 2023.
The Securities and Exchange Commission (‘Commission’) deems it necessary and in the interest of the public to accept the Offer of Settlement (the ‘Offer’) submitted by Patrick N. Thayer (‘Respondent’ or ‘Thayer’), for the purpose of settlement of these proceedings instituted against Respondent. Respondent has submitted an Offer of Settlement (the ‘Offer’), which the Commission has determined to accept. The Commission finds that Thayer between November 2013 until August 2022, Thayer sold mutual funds in a brokerage customer’s account and transferred the funds to an account he established in the customer’s name which he then used for his personal benefit, all without the customer’s permission or knowledge. On June 13, 2023, the Commission filed a complaint against Thayer. Thayer agreed to a bifurcated settlement. On July 19, 2023, the court imposed permanent injunctive relief against Thayer, enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In June 2023, Thayer was indicted by a state grand jury in a criminal proceeding styled State of Ohio v. Patrick Noel Thayer, Case No. 23CR40675 (Warren County, Ohio), which was based on the same underlying conduct as the Commission’s complaint. On August 4, 2023, Thayer pled guilty to three counts of the criminal indictment: unlawful securities practices (Count 2); aggravated theft (Count 3); and identity theft (Count 5). On October 2, 2023, Thayer was sentenced to a term of incarceration of 5-7 and a half years on Count 2, 5 years on Count 3 and 5 years on Count 5, with each period of incarceration to be served consecutively, for a total period of incarceration of 15 years minimum and 17 and a half years maximum. Thayer was also ordered to pay restitution of $1,310,605.81 to the brokerage customer, with a credit for $285,370.68 previously paid, leaving a balance of $1,025,235.13.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest.
Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Thayer has been in the securities industry for more than 12 years. Thayer has been registered as a Broker with LPL Financial LLC since 2020.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.