Securities Lawyers Blog
Investment fraud attorneys at Gana Weinstein LLP have been investigating previously registered broker Charles Dixon (Dixon). According to BrokerCheck Records kept by The Financial Industry Regulatory Authority (FINRA), in January 2018, Dixon was barred from the financial industry for failing to appear at an on-the-record testimony concerning allegations that he was exercising discretion without prior written authorization. According to FINRA, Dixon consented to the sanction and bar due to the fact that he refused to appear to the testimony. At this time it is unclear the extent and nature of the unauthorized trading that occurred.
FINRA’s investigation was in connection with Dixon’s termination from Morgan Stanley. In March 2017, Dixon’s employer, Morgan Stanley, terminated Dixon due to a customer allegation that Dixon was exercising discretionary power in a customer’s non-discretionary account without prior customer written approval.
In addition, Dixon has been subject to two customer disputes concerning unauthorized trading and churning. In October 2016, a customer alleged that from June 2013 to July 2016, Dixon was executing unauthorized trades in the customer account. This dispute settled for $225,000.
Unauthorized trading is a form of security fraud. “Security fraud” includes a wide range of illegal activities including the deception of investors and the manipulation of the financial markets. Examples of fraud include false representations, unauthorized trading, unsuitable investment recommendations, value manipulation, and Ponzi schemes.
Brokers are not allowed to engage in unauthorized trading in non-discretionary customer accounts. 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). If a customer’s account is indeed discretionary, there must be legal documentation such as a power of attorney to confirm the customer’s approval and knowledge of the discretionary status of the account.
Dixon also has an unusual amount of complaints on his record in comparison 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.
Dixon entered the securities industry in 1987. From June 2009 to April 2017, Dixon was registered with Morgan Stanley. From April 2007 to June 2009, Dixon was registered with Morgan Stanley & Co. Incorporated. From November 1999 to April 2007, Dixon was registered with Morgan Stanley DW Inc. From June 1994 to November 1999, Dixon was registered with Painewebber Incorporated. Dixon 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 of brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover