Last Updated: August 2024 (Paris, AR)
National securities fraud lawyers at Patil Law P.C. are investigating current LPL Financial LLC broker Timothy Cleveland (CRD #5391137) regarding allegations of making unauthorized withdrawals from a client account through margin and misappropriating funds.
The recently settled complaint raises serious concerns about Mr. Cleveland’s handling of client accounts and potential misuse of margin accounts to facilitate unauthorized withdrawals.
Critical Insights About Paris, AR Financial Advisor Timothy Cleveland
- Advisor Name: Timothy J. Cleveland
- CRD: 5391137
- Location: Paris, AR
- Current Employer: LPL Financial LLC
- Classification: Registered Representative & Investment Adviser Representative
- Primary Location: 212 W Walnut St., Paris, AR 72855
- Can Timothy Cleveland be sued in FINRA arbitration: Yes
- Customer Disputes: One recently settled complaint involving unauthorized withdrawals
- Settlement Amount: $25,642.34 (paid by advisor)
- Current Registrations: Licensed in 20 states
- Years of Experience: Since 2007
- Previous Employers: Wells Fargo Advisors (2015-2019), Edward Jones (2007-2015)
- Professional Qualifications: Series 24, 7, 66 licenses
- Outside Business Activities: River Valley Wealth Management (DBA for LPL business), Real estate rentals
- Principal License: General Securities Principal (Series 24)
Details of Current Investigation
A customer complaint filed in August 2024 alleged that Mr. Cleveland took two unauthorized withdrawals totaling $25,000 from a customer’s account through margin and placed the funds in an office payroll account. The complainant, who was a former financial advisor and partner of Mr. Cleveland, alleged that while she had approved prior loans from her account to the office payroll account, she did not approve these specific transactions. The matter was settled in October 2024 for $25,642.34, with Mr. Cleveland personally paying the entire settlement amount.
Analysis of Alleged Misconduct
The allegations involve several serious potential violations:
- Unauthorized use of margin accounts
- Misappropriation of client funds
- Breach of fiduciary duty
- Violation of firm policies
- Improper use of client accounts for business purposes
- Potential conversion of customer funds
Regulatory Framework and Investor Protection
SEC Regulation Best Interest
Reg BI requires brokers to:
- Protect client assets
- Obtain explicit authorization for transactions
- Maintain accurate records
- Disclose conflicts of interest
- Implement proper controls
FINRA Rules and Their Significance
FINRA Rule 2010 (Standards of Commercial Honor):
- Requires high standards of commercial honor
- Mandates observance of just and equitable principles of trade
- Prohibits conversion of customer funds
FINRA Rule 4512 (Customer Account Information):
- Requires proper documentation of account authority
- Mandates accurate record keeping
- Requires proper authorization for transactions
Professional Background
Mr. Cleveland entered the securities industry in 2007 with Edward Jones, later working at:
- Wells Fargo Advisors Financial Network (2015-2019)
- LPL Financial LLC (2019-present)
- Holds principal/supervisory qualifications
Red Flags for Investors
- Recent settlement involving unauthorized account access
- Personal payment of significant settlement amount
- Multiple transitions between major firms
- Use of margin accounts for unauthorized withdrawals
- Business partnership disputes affecting client accounts
- Real estate investment activities potentially creating conflicts
- Multiple office locations and business entities
Implications for Current and Former Clients
Current and former clients should:
- Review all account statements for unauthorized activity
- Check for unauthorized margin use
- Verify all withdrawals and transfers
- Review account agreements and authorizations
- Monitor margin balances and interest charges
- Consider independent account review
- Document any suspicious activity
- Understand their rights regarding unauthorized transactions
Patil Law P.C. Will Help You Recover Your Investment Losses
If you have suffered investment losses in an account handled by Mr. Cleveland, discovered unauthorized transactions, or have concerns about margin use in your account, please contact Attorney Patil online or call (800) 950-6553 for a free initial consultation. Our securities fraud attorneys work on a contingency fee basis, meaning we only get paid if we help you recover money.
