The financial industry designates transactions in one of two ways: either a transaction is solicited or it is unsolicited. A solicited trade occurs where a registered representative contacts the client and initiates the buy or sell transaction. Conversely, where a client initiates the trade, the trade confirmation will indicate unsolicited denoting the registered representative did not contact the client to initiate the trade. The difference between a solicited and unsolicited trade is significant because registered representatives and broker-dealers may be held liable for unsuitable solicited trades, whereas they cannot be held liable, generally, for unsolicited trades.
FINRA’s Department of Enforcement investigated Wright and found he mismarked approximately 249 solicited transactions as unsolicited thereby causing Ameriprise’s books and records to be inaccurate in violation of federal securities laws. According to FINRA, Wright had solicited each order by bringing the relevant security or transaction to the attention of the customer, which included option trades and uncovered options trades. FINRA alleged Wright mismarked the order tickets as solicited instead of unsolicited in order to circumvent Ameriprise’s policies and procedures, which prohibited its registered representatives from soliciting uncovered option trades.
Based upon the foregoing misconduct, FINRA alleged Wright violated NASD Rule 3110 and FINRA Rule 2010. Specifically, NASD Rule 3110 requires each FINRA member to “make and preserve books, accounts, records, memoranda, and correspondence in conformity with all applicable laws, rules, regulations and statements of policy promulgated thereunder … and as prescribed by SEC Rule 17a-3.” Accordingly, FINRA fined Wright $5,000 and suspended him from the financial industry for sixty days.
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 losses investing with Wright through Ameriprise, you may be eligible to bring a FINRA arbitration claim to recover your investment losses. Please complete our online form or contact one of our attorneys at (800) 627-2179 for a free consultation.