The Financial Industry Regulatory Authority (FINRA) recently announced Scott Jason Wallach (Wallach) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations against him. The settlement concerns allegations Wallach exercised discretion in his customer’s account without written authorization. As a result, Wallach was suspended from the financial industry for one month and ordered to pay a $5,000 fine.
Wallach (FINRA CRD No. 3108314) is an associated person registered with FINRA since 1998. From 2003 to 2017, and during the relevant time period, Wallach worked for Wells Fargo Clearing Services, LLC (“Wells Fargo”). Wallach currently works for Comprehensive Asset Management and Servicing, Inc. Wallach’s FINRA BrokerCheck Report discloses 4 negative events, including two customer disputes.
FINRA’s Department of Enforcement investigated Wallach’s alleged misconduct and found he exercised discretion and unauthorized trades on five occasions in one of his customer’s account. According to FINRA, Wallach’s customers neither provided written authorization for his discretionary trading, and nor did Wells Fargo approve the accounts for discretionary trading.
Based upon the foregoing misconduct, FINRA alleged Wallach 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.