The Financial Industry Regulatory Authority (FINRA) recently announced John Fotis Valliades (Valliades) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations. The settlement concerns allegations Valliades effected several discretionary transactions without written authorization in three customer accounts. As a result, Valliades was suspended from the financial industry for 20 days and ordered to pay a $5,000 fine.
Valliades (FINRA CRD No. 726555) is an associated person registered with FINRA since 1981. Since 1998, Valliades has worked for Petersen Investments, Inc. (“Petersen Investments”). Valliades’ FINRA BrokerCheck report reveals 10 disclosures, including 8 customer disputes that have been resolved.
FINRA’s Department of Enforcement investigated Valliades’ alleged misconduct and found he exercised discretion and unauthorized trades in three of his customers’ accounts between May 2011 and March 2014. FINRA noted Valliades spoke to his customers about certain investments in the customers’ accounts. However according to FINRA, Valliades exercised time and place discretion even though he did not have written authorization from the customers to place discretionary trades. In addition, FINRA alleged Petersen Investments did not approve the aforementioned accounts as discretionary accounts.
Based upon the foregoing misconduct, FINRA alleged Valliades 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 Valliades through Petersen Investments, 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.