FINRA’s Department of Enforcement investigated Benavidez’s alleged misconduct and found he exercised discretion on behalf of numerous customers. Specifically, January 2013 and January 2015, Benavidez exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts. FINRA alleged Benavidez 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 Waddell & Reed.
Based upon the foregoing misconduct, FINRA alleged Benavidez violated NASD Rule 2510(b) and 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 Benavidez through Waddell & Reed, 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.