FINRA’s Department of Enforcement investigated Sullivan’s alleged misconduct and found he exercised discretion on behalf of three of his customers. Specifically, between September 2011 and December 2014, Sullivan effected “numerous” discretionary transactions in his customers’ accounts. FINRA alleged Sullivan exercised discretion in his customer’s accounts without written authorization, without designating the accounts as discretionary accounts, and without disclosing the nature of the relationship to JP Morgan.
Based upon the foregoing misconduct, FINRA alleged Sullivan violated NASD Rules 2510(b) and 2010. NASD Rule 2510 prohibits a registered representative from exercising any discretionary authority in a customer’s account unless such customer has provided prior written authorization and the account has been accepted by a FINRA member. In cases where a financial advisor executes unauthorized trades without proper authorization, the financial advisor and brokerage firm may be found liable, as well as disciplined by securities regulators such as the case here.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damages with Sullivan through JP Morgan, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.