James P. Hilty Jr., an Ocala, Florida based broker formerly employed with Edward D. Jones & Co., L.P. (Edward Jones) submitted a letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he entered discretionary trades customers’ accounts without the necessary prior written customer authorization.
FINRA found that while employed as a General Securities Representative with Edward Jones, James Hilty exercised discretion in three customer accounts with the execution of 14 trades. In violation of NASD Conduct Rule 2510(b) and FINRA Rule 2010, Mr. Hilty neglected to obtain the necessary prior written authorization for discretionary trading from the customers or his member firm. FINRA stated that none of the customers were aware of the trades executed by Mr. Hilty at the time they were made. Mr. Hilty had instead previously spoken with the customers about a trading strategy, but he failed to discuss the subject trades prior to their execution or on the day of the trades.
Further, Edward Jones does not approve customer accounts for discretionary trading. Hence, none of the customers’ accounts had been approved for the execution of the discretionary trades. Consequently, James Hilty was assessed a deferred fine of $5,000 and was suspended from association with any FINRA member in any capacity for 45 days. The suspension was in effect from February 1, 2016 through March 16, 2016.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of misconduct which are in violation of industry rules and procedures. In order to protect customers from such misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for losses flowing from the employees’ misconduct. As a result, account holders who have suffered losses stemming from unauthorized transactions or other types of misconduct by their broker or registered representative can bring forth claims to recover damages against broker-dealers like Edward Jones, which have a duty to supervise its employees in order to prevent broker misconduct.
Have you suffered losses in your Edward Jones investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Edward Jones stockbrokers for unauthorized trade violations and other types of prohibited stockbroker misconduct.
The most important of investors’ rights is the right to be informed! 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 protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.