James Madden, a financial advisor with Raymond James & Associates, has been fined and suspended for unauthorized trading in investors’ accounts. FINRA rules as well as his firm’s policies require financial advisors to have written consent from investors before executing transactions in their accounts. However, Madden disregarded these rules and executed the transactions without permission.
FINRA requires financial advisors to have written permission from their customers before they make transactions in their accounts. This rule is in place to protect the investor, and ensure that every transaction that is made is beneficial.
Investors who do not have discretionary accounts, which automatically allow the advisor to make transactions, likely want to be more involved thus their signature is required for every transaction. These investors want the opportunity to approve or decline certain transactions.
Madden betrayed his customers’ trust as well as their wishes when he went against the rules and policies in place to protect investors. He exercised discretion in the accounts of fifteen customers without receiving their written approval. Although he received prior verbal approval from these customers, he did not speak with them right before making the transaction to ensure that it was still an action the investor wanted to take.
If your financial advisor has made transactions in your account without your written approval, you may have a claim. Contact Investor Defense Law to see if you can recover your losses.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington recover losses caused by stockbrokers, financial advisers, or investment firms. To learn more, contact an investment fraud attorney at 800.487.4660.