FINRA’s Department of Enforcement investigated Papadea’s alleged misconduct and found he exercised discretion and unauthorized trades on behalf of two of his customers. Specifically, between September and October 2015, Papadea executed 27 trades without authorization from the customers. According to FINRA, the customers were not aware of the trades, but rather had either spoken with Papadea about the transactions at least 30 days prior or spoke with Papadea about the trades after they were effected. Further, Papadea failed to obtain prior, written authorization from his customers and Wells Fargo did not designate the accounts as discretionary.
Based upon the foregoing misconduct, FINRA alleged Papadea 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 Papadea through Wells Fargo, 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.