A broker in Hillsboro, OR, agreed to a $10K fine and 8-month suspension to settle FINRA charges he exercised unauthorized discretion when he entered mutual fund exchanges in customer accounts without receiving the customers’ prior express authorization for the specific trade.  The RR decided to enter these transactions without the customers’ express authorization over market volatility concerns.

While the RR's customers had verbally agreed to let him enter trades in their accounts without first contacting them, such authorizations were not in writing.  In addition, the RR had not obtained his member firm’s approval to exercise discretion in these accounts - the firm's WSP's specifically prohibited RR's from exercising discretion in customer accounts, regardless of whether such an arrangement was in writing. 

FINRA further charged that the RR engaged in unauthorized trading in customer accounts without prior written or verbal customer authorization, and those customers complained to the firm in writing that the trades made in their accounts were not authorized.  

This is FINRA Case #2008015731901.   [Disciplinary Actions for February]