The Financial Industry Regulatory Authority (FINRA) recently announced Robert James Batchen (Batchen) entered into a Letter of Acceptance, Waiver and Consent. The settlement concerns allegations Batchen exercised discretion and recommended unsuitable leveraged and inverse Exchange-Traded Funds ('”Non-Traditional ETFs”) in a customer’s accounts. As a result, Batchen was suspended from the financial industry for five months and subject to a $15,000 fine.
Batchen (FINRA CRD No. 2106288) is an associated person registered with FINRA as a general securities representative since 1990. From 1995 to 2012, Batchen worked for A.G. Edwards & Sons, Inc. and then its successor Wells Fargo Advisors, LLC (“Wells Fargo”). From 2012 through October 2015, Batchen worked for Uhlmann Price Securities, LLC. Batchen is no longer associated with any FINRA member; however, he remains subject to FINRA’s disciplinary power.
FINRA’s Department of Enforcement investigated Batchen’s alleged misconduct and found he exercised discretion and unauthorized trades on behalf of one of his customer’s from January 2008 through June 2012. Specifically, FINRA alleged Batchen transacted 929 discretionary trades in the customer’s account involving equities, exchange-traded funds, non-traditional ETFs and options. According to FINRA, Wells Fargo did not approve the customer’s accounts for discretionary trading.
In addition, FINRA also alleged Batchen executed unsuitable trades in the customer’s accounts. For example, Batchen recommended the customer invest in non-traditional ETFs for long holding periods. FINRA alleged Batchem recommended the transactions without fully understanding each product and against the customers’ investment objectives and risk tolerance. Batchen’s unsuitable investment recommendations caused the customer to lose approximately $57,000 due to the investments.
Based upon the foregoing misconduct, FINRA alleged Batchen violated NASD Rules 2310, IM 2310-2, 2510(b), as well as FINRA Rules 2010, 2110 and 4511. 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 Batchen 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.