Securities Lawyers Blog
Securities attorneys at Gana Weinstein LLP have been investigating previously registered broker Shaun Hayes (Hayes). According to BrokerCheck Records, Hayes has been subject to seven customer disputes in the past year, four of which are still pending. The majority of these disputes allege unauthorized trading of customer accounts.
In December 2017, a customer alleged that from May 2013 to December 2017, Hayes was executing unauthorized trades in the customer’s accounts. This dispute is currently still pending.
In December 2017, another customer alleged that Hayes was engaging in unauthorized trades in the customer account and is requesting $139,000 in damages. This complaint is still pending.
In December 2017, a customer alleged that Hayes was instigating unauthorized trades in the customer account. This case settled for $125,000.
“Securities fraud” covers a wide range of illegal activities including the deception of investors or the manipulation of the financial markets. Fraud includes false representations, unauthorized trading, value manipulation, and Ponzi schemes. One example of security fraud is unauthorized trading. Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Under the NASD Conduct Rule 2510(b), a broker is prohibited from trading in a non-discretionary customer account without prior written authorization from the customer. Unauthorized trading is a type of investment fraud because the Securities Exchange Commission (SEC) has found that disclosures of trades being made are essential and material to an investor. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.
The number of complaints and regulatory actions on Hayes’ record 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. However, studies have found that in certain parts of California, New York or Florida, the rates of disclosure go up to as high as 18%. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.
Hayes entered the securities industry in 2005. From February 2012 to August 2017, Hayes was registered with Merrill Lynch, Pierce, Fenner & Smith, Incorporated. From June 2005 to March 2012, Hayes was registered with AXA Advisors, LLC. Hayes is currently not registered with any firm.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of unauthorized trading and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.