The Securities Litigation Expert Blog

Finra Cracking Down on Unauthorized Discretion

Posted by Jack Duval

Apr 22, 2013 3:23:30 AM

Finra has disciplined 17 registered representatives for taking unauthorized discretion in client's accounts - twice the pace of such actions comparable to the same period last year, Thomson Reuters reports. (TR)

For those of you needed a refresher, Finra Rule 2510 is crystal clear, there can be no taking of discretion without prior written authorization.  (2510)  Importantly, this excludes any kind of verbal understandings as to strategies or transactions.

As my branch office supervisor at Merrill Lynch used to say, "if you make an unauthorized trade, the client has a lifetime put on it."

Compliance and supervisory personelle would be wise to reinforce Rule 2510 with their registered representatives in their continuing education efforts.

Read More

Topics: FINRA, discretion, continuing education, Investment Advisors, litigation, Rule 2510, supervision, SEC, Compliance, education

Subscribe to Email Updates

Recent Posts

Posts by Topic

see all