The Financial Industry Regulatory Authority (FINRA) recently announced Richard H. Yada (Yada) entered into a Letter of Acceptance, Waiver and Consent without admitting or denying the allegations against him. The settlement concerns allegations Yada exercised discretion in twelve of his customers’ accounts without written authorization, thereby causing his firm’s books and records inaccurate. As a result, Yada was suspended from the financial industry for sixty (60) business days and fined $5,000.
Yada (FINRA CRD No. 1077317) is an associated person registered with FINRA since 1982. From about 2009 to March 2017, Yada worked for LPL Financial LLC (“LPL”). In February 2017, Yada was terminated from LPL for exercising discretionary authority in customer accounts in violation for firm policies. Yada has at least one customer complaint during this time period. Yada currently is not associated with any FINRA member.
FINRA’s Department of Enforcement investigated Yada’s alleged misconduct and found over the course of seven (7) years he exercised discretion in twelve customer accounts and executed hundreds of trades without written authorization. Specifically, FINRA alleged Yada implemented a strategy where he purchased shares of the same stock on different days and sold the shares once they breached a threshold.
Based upon the foregoing misconduct, FINRA alleged Yada 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.