FINRA’s Department of Enforcement investigated Marcus’ alleged misconduct and found he exercised discretion and unauthorized trades in one of his customer’s account on January 7, 2015. FINRA alleged Marcus exercised 48 discretionary trades. According to FINRA, Marcus exercised discretion even though he did not have written authorization from the customers to place discretionary trades. In addition, FINRA alleged CGMI did not approve the aforementioned accounts as discretionary accounts.
Based upon the foregoing misconduct, FINRA alleged Marcus 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 Marcus through CGMI, 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.