FINRA’s Department of Enforcement investigated Bottoms’ alleged misconduct and found she exercised discretion and unauthorized trades in many of her customers’ accounts in June 2015. FINRA alleged Bottoms exercised discretionary trades in 73 customer accounts. According to FINRA, Bottoms invested cash balances held in the 73 customer accounts in accordance with each of the customer's existing portfolio model even though she did not have written authorization from the customers to place discretionary trades.
Based upon the foregoing misconduct, FINRA alleged Bottoms violated FINRA Rule 2010, 4511 and 8210. For example, FINRA Rule 4511 requires each member to make and preserve books and records in conformity with Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934, which requires that a firm preserve records relating to communications and those records must be accurate. 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 Bottoms 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.