According to the Court of Appeal:

An imposter posing as investment advisor Daniel Corey Payne of Lifetime Financial, Inc. (Lifetime) stole more than $300,000 from Mark Frank Harding. Before this occurred, Lifetime had received several inquiries from other individuals about a potential imposter who was posing as Payne and asking for funds; Lifetime did not post a warning about the imposter on its website or take any other significant action.

Harding v. Lifetime Financial Inc., 2025 WL 815697 (Cal. Ct. App. Mar. 14, 2025). In an effort to recover his life savings, Harding sued Lifetime alleging "if Lifetime and LPI [a related advisory firm] had posted a warning on their website about the imposter, or if they had reported the matter to FINRA, Harding would have realized the person he was communicating with was an imposter, and he would not have lost his life savings". 

Harding's efforts failed to meet with success in the trial court which granted summary judgment for the defendants. In affirming the trial court, the Court of Appeal noted that as a general matter there is no duty to protect others from the conduct of others. More specifically, it could find "no statutory or case authority holding that an investment advisor owes a duty to nonclients to post a notice on its website or notify law enforcement that someone has been impersonating the investment advisor."

Harding argued that FINRA Rule 4530 created a duty to warn. That rule requires FINRA members to “promptly report to FINRA . . . after the member knows or should have known . . . [that] [¶] (1) the member or an associated person of the member: [¶] . . . [¶] (B) is the subject of any written customer complaint involving allegations of theft or misappropriation of funds or securities or of forgery.” The Court of Appeal disagreed, finding:

in order for Defendants to have had a reporting duty under this rule, they would have had to receive a written complaint which alleged Defendants engaged in theft, misappropriation of funds or securities, or forgery, and that written complaint would have had to come from a person whom Defendants engaged or sought to engage in security activities. That is not what happened here.

Harding illustrates how difficult it can be to detect an impersonation. The imposter initially contacted the plaintiff by phone and the plaintiff spoke with the imposter several times thereafter. The imposter used the name of a representative at Lifetime and had an email address that included "lifetime" as part of the address. The plaintiff researched Lifetime online and verified Lifetime's CRD number and Lifetime's registration.