I owned a piece of commercial real estate that was foreclosed on. I recently learned that the bank was planning on selling the note. A longtime friend, who also happens to be a client at my broker-dealer, is willing to buy the note from the bank and work with me on paying him back. We've talked about his holding the property until the income from it lets him recoup what he would pay for the note and then selling it back to me for a nominal amount. Or we may enter into an agreement for me to buy it from him now for what he will pay for the note but with a very favorable payment plan. Would this be OK?

FINRA Rule 3240 prohibits borrowing money from clients or lending money to them. While the purchase by the client of the note may not, in and of itself, be considered "borrowing money" from the client, you should at a minimum disclose this to your firm's compliance department.

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