Former UBS Broker Suspended Over 581 Unauthorized Discretionary Trades

Former UBS Financial Services broker Mark L. Sullivan agreed to a three-month suspension and a $10,000 fine under a Letter of Acceptance, Waiver, and Consent (AWC) with FINRA. According to FINRA, between January 2021 and June 2024, Sullivan exercised discretion in two customers' accounts without written authorization, in violation of FINRA Rules 3260(b) and 2010. He also mismarked the same 581 trades as unsolicited, in violation of FINRA Rules 4511 and 2010. Sullivan consented to FINRA's findings without admitting or denying them.

Sullivan first registered with FINRA in 1995. From November 2015 to August 2024, he was registered as a General Securities Representative with UBS Financial Services Inc. On August 23, 2024, UBS filed a Form U5 stating that it terminated Sullivan after determining that he "violated firm policies by exercising discretion, mismarking tickets, and was not forthcoming during the investigation." In November 2024, UBS amended the form to report a related customer complaint. Sullivan was not associated with any FINRA member firm at the time of the AWC.

FINRA Rule 3260(b) prohibits a broker from exercising discretion in a customer's account, meaning deciding what to buy or sell, how much, or when. A broker may do so only if the customer gave prior written authorization and the firm accepted the account as discretionary in writing. FINRA Rule 4511 requires firms to keep accurate books and records, and a broker who causes the firm's records to be inaccurate also violates the rule. For example, a broker would violate Rule 3260(b) by selling a client's stock on his own judgment after the client said only "do what you think is best." A broker would violate Rule 4511 by marking a trade he recommended as one the customer requested on his own.

According to FINRA, Sullivan placed 581 trades in the accounts of two customers over three and a half years without written discretionary authority. FINRA noted that the customers allowed Sullivan to exercise discretion, but neither customer gave written authorization, and UBS never accepted the accounts as discretionary. Sullivan also allegedly marked all 581 trades as "unsolicited," which made it appear that the customers initiated them, and he stated on three annual compliance questionnaires that he did not exercise discretion in customer accounts. Written authorization and accurate trade records allow a firm to supervise trading in customer accounts, and mismarking trades as unsolicited can hide a broker's activity from supervisors.

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.

The content on this site reflects personal opinions and does not constitute statements of fact. No findings have been made against the firms or individuals mentioned. This blog is intended solely for educational purposes, drawing on publicly available information to provide general insights and a basic understanding of the law. It is not a substitute for legal advice.