Steven Tarasius Yellen of El Paso, Texas submitted a Letter of Acceptance Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly exercising discretion and engaging in unauthorized trading in violation of NASD Rule 2510(b) and FINRA Rules 4511 and 2010.
From August 1984 until February 2016, Steven Tarasius Yellen was registered with Morgan Stanley as a General Securities Representative. According to FINRA, during his time with Morgan Stanley, Steven Yellen exercised discretion in a customer’s account without written authorization or acceptance of the account as discretionary and engaged in unauthorized trading. The findings stated that he opened a second account for the same customer without knowledge and transferred $30,000 from the original account to execute two unauthorized transactions. The firm did settle with the customer and filed a Uniform Termination Notice for Securities Industry Registration (“Form U5”) terminating Yellen.
In March 2016, Yellen then registered with Ameriprise Financial Services. FINRA also stated that during his time with this firm he again engaged in unauthorized trading by entering 16 trades for 10 customers that were beyond the option trading risk levels. The findings included that Yellen caused his new firms’ books and records to be inaccurate by mismarking options order tickets as unsolicited that were solicited in order to bypass the firm systems that blocked him. FINRA later found that prior to accepting employment from Ameriprise, Yellen sent Morgan Stanley customers personal information to his own email in violation of the firm’s policy and without knowledge or consent. Consequently, Yellen caused Morgan Stanley to violate its obligations under Regulation S-P.
NASD Rule 2510(b) provides that: “No member or registered representative shall exercise any discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member, as evidenced in writing by the member or the partner, officer or manager, duly designated by the member, in accordance with Rule 3010.” Specific advance authorization and approval are important to assure a firm that the trading is being done with the consent of the customer and to alert the firm that extra oversight of the sales representative’s handling of the account may be necessary to protect against improper or unsuitable trading.
Without admitting or denying FINRA’s findings, Steven Tarasius Yellen was fined $25,000 and suspended from association with any FINRA member in all capacities for one year. The suspension is in effect from November 4, 2019, through November 3, 2020.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from unauthorized use of discretion, unauthorized trading and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Morgan Stanley and Ameriprise, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Morgan Stanley or Ameriprise account due to unauthorized use of discretion and/or unauthorized trading by your broker? Was Steven Tarasius Yellen your stockbroker? 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 Morgan Stanley and Ameriprise stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
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 40 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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.