FINRA Suspends Broker for Impermissible Discretionary Trading

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

According to the AWC, the broker effected 165 transactions in 14 brokerage accounts over a four-year period. FINRA highlighted that while the customers had permitted the broker to make trading decisions in their accounts, the broker lacked "written authorization" from the customers and the firm had not accepted the accounts as discretionary. FINRA stated that the broker's firm prohibited discretionary trading except in certain limited account types that were not involved in this matter.

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 a one-month suspension from associating with any FINRA member in any capacity and a $5,000 fine.