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Waddell & Reed Broker Suspended by FINRA for Exercising Discretion without Authorization

Carlos Benavidez Jr., a former registered representative with the Louisville, Kentucky branch of Waddell & Reed, consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he exercised discretion in 80 customer accounts without the necessary prior written authorization from the customers or his member firm.

According to FINRA, Carlos Benavidez Jr., of Louisville, Kentucky, exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts. Further, FINRA found that Mr. Benavidez participated in the backdating of 26 customer notes in order to falsely reflect the date of the conversations with the customers. Mr. Benavidez did not have the written authorization from his customers to exercise discretion, nor had he received written approval from Waddell & Reed for discretionary trading in these accounts.

Carlos Benavidez Jr. was suspended from association with any FINRA member in any capacity for two months and fined $10,000. The suspension was in effect from February 1, 2016 through March 31, 2016.

Attorney Pearce began his career at the SEC as an enforcement attorney more than 35 years ago. His SEC, FINRA, CFTC and Florida OFR defense law practice clients have included public companies and their officers and directors, broker-dealers, investment advisors, and individuals being investigated in connection with their personal securities transactions. He has broad, extensive experience in matters related to alleged violations of FINRA rules and firm policies and procedures, as well as 10b-5 fraud violations including, “insider trading,” Section 16(b) “short swing profit,” and Section 14 “proxy rule” violations, and Section 9 “market manipulation” cases.

Have you have been contacted by FINRA, the SEC, CFTC and/or the Florida OFR and believe that you may be subject of an investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends various entities and individuals who may be the subject of an investigation or enforcement action regarding their alleged involvement in securities or commodities laws violations.

This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.