FINRA’s Department of Enforcement investigated Brown’s alleged misconduct and found he exercised discretion and unauthorized trades in one of his customer’s accounts. According to FINRA, between May 2015 and October 2015, Brown executed 28 unauthorized and discretionary transactions in one of his customer’s accounts. There is no evidence Brown received authorization from the aforementioned customer prior to executing the transactions or informed Chapin, Davis that he intended to use discretion.
Based upon the foregoing misconduct, FINRA alleged Brown violated NASD Rule 2510(b), as well as FINRA Rule 2010. For example, 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 Brown through Chapin Davis, you may be able to recover your losses through FINRA arbitration. Please contact us for a free, no-commitment initial consultation or contact one of our attorneys at (800) 627-2179 to schedule a free consultation or complete our free case evaluator.