The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Brett Murphy (Murphy). According to BrokerCheck records Murphy has been subject to at least two customer complaint, and one financial disclosure. The customer complaints against Murphy allege securities law violations that including unsuitable investments and unauthorized trading among other claims.
In August 2016, a customer filed a complaint alleging that Murphy was not properly supervised, and excessively traded the account in unsuitable unit investment trusts while employed at Oppenheimer & Company Inc. from July 2011 through August 2016 causing $2,000,000 in damages. The claim is currently pending.
One customer complaint filed in March 2015, alleged that Murphy made unauthorized transactions in customers account causing aggregate losses of approximately $5,000.
Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. The broker must first discuss all 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 of fraudulent nature. This is because the omission that the broker intends to engage in trading is material information that the investor is entitled to have prior to the trade’s execution.