FINRA Suspends Broker for Unauthorized Trades

FINRA suspended a broker for exercising discretion in customer accounts without written authorization.

According to the AWC, the broker effected "604 trades in 10 customers' accounts" without obtaining written authorization from the customers." FINRA stated that although the customers were aware that the broker was "placing trades in their accounts," none had provided prior written authorization for discretionary trading. FINRA also determined that that the firm had not accepted any of the accounts as discretionary. 

FINRA found that the broker's conduct violated FINRA Rules 2010 ("Standards of Commercial Honor and Principles of Trade") and 3260(b) ("Discretionary Accounts"). 

To settle the charges, the broker agreed to (i) a one-month suspension from associating with any FINRA member in all capacities. FINRA stated that the Broker had previously filed for bankruptcy and thus "no monetary sanctions" were imposed.