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Regulatory Sanctions

In a Flash, This Broker Is Out of a Job

February 13, 2019

by Howard Haykin


In March 2018, Edward Jones U5’d a broker due to “concerns that the Financial Advisor was effecting securities transactions without speaking with the client on the day of the trades or effecting securities transactions without speaking with an authorized Party." So much for the broker's unblemished record during his first 15 years - all with Edward Jones. For this broker, it was … ‘THREE STRIKES AND YOU'RE OUT’.



WHAT WENT WRONG.    In January 2019, FINRA reported that an Edward Jones broker had agreed to a $7.5K fine and a 30-day suspension to settle charges that he accepted instructions to effect transactions in customer accounts from a 3rd party who did not have written authorization accepted by his member firm to provide instructions.


  • On February 28, 2018, he purchased approximately $33,000 in mutual funds in a family's trust account based on instructions - not from either of the 2 co-trustees, a married couple, who were authorized to act on behalf of the Trust – but from their daughter, who did not have written authorization. [Violation of NASD Conduct Rule 2510(b), Discretionary Authority]


  • One day later, on March 1, 2018, the broker opened four 529 plan accounts at Edward Jones for another customer. That same day, he entered 5 mutual funds purchase orders for each account (investments totaling $6,600) based on instructions – not from the named customer on the account – but from the customer’s daughter, who did not have written authorization. [Violation of MSRB Rule G-17]


  • On March 20, 2018, Edward Jones filed Form U5, terminating its relationship with the broker for cause.



RELEVANT (PRIOR) DISCIPLINARY HISTORY.    From May 2015 through June 2015, the broker effected 15 discretionary trades in a customer's securities account based on verbal – but not written - authorization from the customer, and without approval from his employing member firm. In June 2017, the broker agreed to a $5,000 fine and a 15-day suspension to settle FINRA charges in this case (AWC #2016048658302).  [Violation of NASD Rule 2510(b)]


In 2015, a customer filed a complaint alleging that, from March 2015 to June 2015, the broker had purchased listed equities and mutual funds without authorization. In August 2015, Edward Jones and the broker settled with the customer for $34,000; firm and broker split the cost of the settlement.



This recent case was reported in FINRA Disciplinary Actions for January 2019.

For further details, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2018058028601.