FINRA’s Department of Enforcement investigated Brown’s alleged misconduct and found he exercised discretion on behalf of one of his customers. Specifically, from October 2013 through February 2014, Browns effected 16 discretionary transactions in one of his customer’s accounts. FINRA alleged Brown exercised discretion in the customer’s account without written authorization, without designating the account as discretionary accounts, and without disclosing the nature of the relationship to JP Morgan.
Based upon the foregoing misconduct, FINRA alleged Brown violated NASD Rules 2510(b); FINRA Rules 2010 and 4511; and Rule 17a-3 of the Securities Exchange Act of 193. 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 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.