The Financial Industry Regulatory Authority (FINRA) recently announced Ethan De Naray (De Naray) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations against him. The settlement concerns allegations De Naray exercised discretion in one of his customer’s accounts without written authorization and mismarked trades, thereby causing his firm’s books and records inaccurate. As a result, De Naray was suspended from the financial industry for thirty (30) business days and fined $5,000.
De Naray (FINRA CRD No. 4571532) is an associated person registered with FINRA since 2002. From 2008 to June 2017, De Naray worked for Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”). Merrill Lynch fired De Naray for exercising discretion in non-discretionary customer accounts and mismarking trades as unsolicited. De Naray is currently registered with Feltl & Company.
FINRA’s Department of Enforcement investigated De Naray’s alleged misconduct and found he mismarked three order tickets as unsolicited, when the trades were actually solicited. Additionally, FINRA alleged De Naray effected more than 100 discretionary transactions in two accounts of one customer without obtaining prior written authorization from the customer. Merrill Lynch did not approve the accounts for discretionary trading.
Based upon the foregoing misconduct, FINRA alleged De Naray violated multiple FINRA Rules including NASD Rule 2510 and FINRA Rules 4511 and 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.