FINRA’s Department of Enforcement investigated Baron’s alleged misconduct and found he exercised discretion in seven of his customers’ accounts. Specifically, Baron executed 161 discretionary transactions in the customers’ accounts without written authorization or designating the accounts as discretionary accounts.
Based upon the foregoing misconduct, FINRA alleged Baron 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. Thus, a financial advisor must receive a client’s written authorization prior to executing trades in a customer’s non-discretionary account. When a financial advisor executes unauthorized trades, the financial advisor and brokerage firm may be found liable, as well as disciplined by securities regulators. Here, Baron executed unauthorized and discretionary trades in non-discretionary accounts thereby violating NASD Rule 2510(b).
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 losses with Baron through Leumi, 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.