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Lester Borroughs Embroiled in an Investor Dispute

Feb 15, 2022 Barred Broker

Lester Borroughs (CRD #:1413972), a broker formerly registered with Lincoln Investment, is involved in an investor dispute, according to his BrokerCheck record, accessed on January 20, 2022. Lester Borroughs has also been barred by the SEC.

Investor Allegations

According to the allegations filed on October 19, 2021, Lester Borroughs allegedly recommended a series of unsuitable annuity transactions. The allegations further state that he also misrepresented the annuities and added unnecessary rider benefits. 

FINRA Rules 

Brokers who recommend a security or investment are subject to FINRA rules and regulations. 

FINRA Rule 2111 requires registered brokers to have a "reasonable basis" to believe that a recommended transaction or investment strategy suits their client's needs.

FINRA Rule 2020 prohibits brokerage firms and stockbrokers from making material misrepresentations or inducing people into buying investments with false statements about their potential benefits. 

The alleged unethical conduct also violates FINRA Rule 2010, which states that brokers must uphold high standards of commercial honor. 

Prior Disputes

Settled Disputes

  1. On July 22, 2020, Lester Borroughs was the subject of an investor dispute after allegedly selling inappropriate and unnecessary life insurance, engaging in improper annuity transactions, and selling fraudulent "safe, fixed-income investments." The allegations further state that Lester Borroughs' firm negligently supervised him. The case settled for $125,000.
  2. On April 28, 2020, Lester Borroughs was the subject of an investor dispute after allegedly recommending unsuitable investments between 2006 and 2007. The case settled for $50,000.
  3. On December 20, 2019, Lester Borroughs was the subject of an investor dispute after alleged elder abuse, misappropriation, and unsuitable investment recommendations, all of which caused the client to lose suffer substantial losses. The case was settled for $200,000.

Denied Disputes

  1. On October 13, 2020, Lester Borroughs was the subject of an investor dispute after allegedly failing to advise a client about a surrender period regarding an annuity he recommended. The damage amount requested was $126,380.
  2. On January 8, 2020, an investor dispute was raised against Lester Borroughs after allegedly misrepresenting a universal life insurance policy he sold in 2010. According to the investors, when premiums were due each year, he told them they did not need to pay the premiums but that the insurance would remain in force. The investors claimed both policies lapsed due to non-payment of premiums.

Investors should know that firms can deny disputes without external review. It is also important to note that you can still pursue a FINRA arbitration and recover your losses following a denial.

SEC Bar

On January 14, 2020, Lester Borroughs was the subject of an SEC Bar; this is after pleading guilty to one count of wire fraud. According to the SEC, Lester Borroughs pled guilty to allegations that he executed a scheme to defraud his clients. He allegedly misappropriated approximately $575,000 from three investors. He reportedly made false or misleading statements to investors, telling them their assets would be used to purchase legitimate investments on their behalf. Boroughs allegedly used his clients' money for his own purposes and to pay returns to other clients.

Lester Borroughs consented to the following sanctions

  1. Bar from participating in any offering of penny stocks
  2. SEC bar from participating as a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Criminal Charge Details

On December 4, 2019, Lester Borroughs pled guilty to wire fraud charges.

Employment Termination Details

On December 6, 2019, Lester Borroughs was fired from his position at Lincoln Investment after pleading guilty to one count of wire fraud and the sale of fictitious insurance contracts to four individuals.

Background Information

Lester Borroughs has passed the following exams:

  • Series 66 - Uniform Combined State Law Examination
  • SIE - Securities Industry Essentials Examination
  • Series 7 - General Securities Representative Examination
  • Series 6 - Investment Company Products/Variable Contracts Representative Examination

He has also worked with the following firms:

  • Crown Capital Securities (CRD#:6312)
  • Brookstone Securities (CRD#:13366)
  • Woodbury Financial Services (CRD#:421)       
  • Tower Square Securities (CRD#:833)
  • Main Street Management Company (CRD#:547)
  • Pruco Securities Corporation (CRD#:5685)

   Kurta Law Can Help

If you have worked with Lester Borroughs and have concerns about your investments, don't hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.