The Financial Industry Regulatory Authority (FINRA) recently announced Eric Steven Korhut (Korhut) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations against him. The settlement concerns allegations Korhut exercised discretion in two of his customers’ accounts without written authorization. As a result, Korhut was suspended from the financial industry for thirty (30) business days. And fined $5,000.
Korhut (FINRA CRD No. 3199787) is an associated person registered with FINRA since 1999. From 1999 to 2016, Korhut worked for Ameriprise Financial Services, Inc. (“Ameriprise”). On August 30, 2016, Korhut was permitted to resign while under suspension for alleged unauthorized trading and use of discretion in a non-discretionary account. Korhut is currently registered with Vanderbilt Securities, LLC.
FINRA’s Department of Enforcement investigated Korhut’s alleged misconduct and found he exercised discretion and executed unauthorized 10 trades in two of his customers’ accounts. According to FINRA, Korhut’s customers neither provided written authorization for his discretionary trading, and nor did Ameriprise approve the accounts for discretionary trading.
Based upon the foregoing misconduct, FINRA alleged Korhut violated FINRA Rule 2010. Unauthorized trading is a violation of FINRA Rule 2010, which requires member firms and their associated persons to observe “high standards of commercial honor and just and equitable principles of trade.” In cases where a financial advisor executes unauthorized trades without proper authorization, the financial advisor and brokerage firm may be found liable for investment damages, 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.