On Nov. 17, 2022, the Financial Industry Regulatory Authority (FINRA) announced that former J.P. Morgan Advisors broker Edward L. Turley had been permanently barred. FINRA’s decision was made in connection with its investigation into multiple complaints regarding Turley’s trading in customer accounts, including the use of foreign currency and margin, and the purchasing and selling of high-yield bonds and preferred stock.
According to a BrokerCheck report, 10 customer disputes have been lodged against Turley since mid-2020. Five of the disputes have been settled, and one was awarded a judgment by an arbitration panel; the five disputes alone totaled more than $43 million in plaintiff settlements, while the other case resulted in a $4 million award. Four claims are still pending, the largest of which requests damages of $55.6 million for misrepresentation and unsuitable trading. Click here for more on the matters.
Without admitting to or denying the findings, Turley consented to the sanction and to the entry of findings that he refused to provide information requested by FINRA. The violation is detailed in FINRA’s Monthly Disciplinary Actions report for January 2023.
What is written discretionary authority?
As noted in an article by Financial Advisor, beyond Turley’s strategy of using short sales in foreign exchange to buy securities, including junk bonds, preferred stocks, ETFs, and master limited partnerships with leverage, the former broker allegedly managed accounts without written discretionary authority.
According to FINRA, generally brokers “may exercise discretionary power in a customer’s account only if the customer has given the broker written authorization to do so and the broker’s firm has approved the account for discretionary trading.” Financial advisors must first consult their customers and firms prior to making trades in accounts or risk committing a serious and prohibited offense.
How do you protect yourself and your accounts from unauthorized trading?
FINRA suggests regularly monitoring your account activity as reflected on your account statements and in your trade confirmations. If you notice evidence of unauthorized trading or errors, notify your broker, his/her supervisor, and/or the brokerage firm’s compliance department immediately. Most importantly, document all conversations with your broker and his/her firm.
We can help.
If you or someone you know has lost money because of broker or financial advisor misconduct, Lance McCardle and his team of experienced investment fraud lawyers can help. Our firm has helped hundreds of clients recover their losses due to broker fraud or negligence. Contact us today.