The Financial Industry Regulatory Authority (FINRA) recently announced James B. Eichner, Jr. (Eichner) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations against him. The settlement concerns allegations Eichner exercised discretion in “at least ten” of his customers’ accounts without written authorization, thereby causing his firm’s books and records inaccurate. As a result, Eichner was suspended from the financial industry for 45 business days and fined $10,000.
Eichner (FINRA CRD No. 3221851) is an associated person registered with FINRA since 2000. During Eichner’s career, he was registered with several firms, including Ladenburg Capital Management Inc.; Joseph Stevens & Company, Inc.; and S.W. Bach & Company. From 2006 through January 2018, Eichner was employed by and registered with National Securities Corporation (“NSC”). In January 2019, Eichner was terminated from NSC for violation of a heightened supervision plan and exercising discretionary authority in customer accounts in violation for firm policies. Eichner has at least six customer complaints during his career. Eichner currently is not associated with any FINRA member.
FINRA’s Department of Enforcement investigated Eichner’s alleged misconduct and found over the course of about a year while employed by NSC he exercised discretion in ten customer accounts and executed numerous trades without written authorization. According to FINRA, Eichner had not obtained prior written authorization from the customers to exercise discretion in their accounts, and NSC had not accepted the accounts for discretionary trading.
Based upon the foregoing misconduct, FINRA alleged Eichner 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 for investment damage, as well as disciplined by securities regulators such as the case here.
Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.