FINRA’s Department of Enforcement investigated Broughton’s alleged misconduct and found he exercised discretion and unauthorized trades in 11 of his customers’ accounts. According to FINRA, between September 2014 and March 2015, Broughton executed 12 unauthorized transactions in 11 different customer accounts. There is no evidence Broughton received authorization from the aforementioned customers prior to executing the transactions.
Based upon the foregoing misconduct, FINRA alleged Broughton 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 Broughton through Morgan Stanley, 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.