Reckless Options Strategy Leads to FINRA Suspension for Zachary Ellis Taylor

According to the Financial Industry Regulatory Authority (FINRA), former general securities representative Zachary Ellis Taylor (CRD No. 6074776) engaged in misconduct by recommending speculative options strategies to at least three senior investors between August 2020 and June 2023. FINRA alleged that Taylor’s recommendations—encouraging the sale of high-risk put options in volatile technology stocks—were not suitable or in his clients’ best interests given their moderate risk profiles. FINRA determined that Taylor willfully violated Rule 15l-1(a)(1) of the Securities Exchange Act of 1934 (Regulation Best Interest), FINRA Rule 2360(b)(19)(A), and FINRA Rule 2010. Taylor accepted a nine-month suspension from association with any FINRA member in all capacities; no monetary penalty was imposed due to his demonstrated inability to pay.

Taylor entered the securities industry in 2012 and worked with several FINRA-member firms. Most recently, he was associated with Oppenheimer & Co., Inc. from August 2020 through June 2023. Oppenheimer terminated his registration after stating it could not verify his authority for certain client trades. Taylor briefly registered with another firm from June through October 2023, but he is not currently affiliated with any FINRA-member firm. Despite his lack of current registration, he remains subject to FINRA’s jurisdiction under Article V, Section 4 of its By-Laws.

Under Regulation Best Interest (Reg BI), brokers must act in the best interest of retail clients when making investment recommendations—meaning they cannot put their own financial interests ahead of the customer’s. FINRA Rule 2360(b)(19)(A) prohibits recommending options transactions unless they are suitable based on the customer’s investment objectives and financial situation, while Rule 2010 requires all members to maintain high standards of commercial honor. For example, a broker may not advise a retiree with moderate risk tolerance to invest heavily in leveraged options, nor should a broker recommend a single volatile stock to a client who needs portfolio diversification.

FINRA found that Taylor advised three retired clients with balanced investment objectives to liquidate their diversified portfolios and engage in concentrated, speculative options trading. He allegedly recommended selling large numbers of put options in high-volatility technology stocks—positions that exposed clients to substantial downside risk. When the stock prices fell, the clients were forced to buy the securities at prices far above market value. One 71-year-old retiree, for instance, lost over $130,000 after his account became 82% concentrated in a single technology stock. FINRA concluded that these recommendations were inconsistent with the clients’ risk tolerances and violated the duty of care imposed by Reg BI and FINRA suitability standards.

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.