Advisor Joseph Yanofsky Sanctioned Over Unauthorized Trading

shutterstock_145368937-300x225According to BrokerCheck records financial advisor Joseph Yanofsky (Yanofsky), currently associated with First Financial Equity Corporation (First Financial), has been subject to eight customer complaints, one regulatory action, and one employment separation for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Yanofsky has been accused by customers of unauthorized trading, unsuitable trading, and misrepresentations among other claims.

In 2015 Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) terminated Yanofsky alleging that the broker exercised discretion in discretionary accounts and provided inaccurate responses to the firm.  Thereafter, FINRA sanctioned Yanofsky in September 2017 findings that he exercised discretion in customer accounts without written authorization to do so. The findings stated that Yanofsky’s exercise of discretion occurred in connection with certain of his member firm’s syndicate equity offerings.  FINRA found that Yanofsky’s customers verbally expressed their general desire and authorization to participate syndicate offerings however their verbal authorization to participate in every syndicate offering was never reduce to writing.

Advisors are not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

The number of complaints against Yanofsky are unusual compared to his peers.  According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015.  Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.  However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher.  Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.

Yanofsky entered the securities industry in 1979.  From 1990 until May 2015 Yanofsky was associated again with Merrill Lynch. Currently, Yanofsky is registered with First Financial out of the firm’s Greenword Village, Colorado office location.

Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.  At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts.  Claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.