Cheng-Ying Chen aka Donna Chen, a broker formerly employed by Minneapolis, Minnesota-based Ameriprise Financial Services, Inc., submitted a Letter of Acceptance, Waiver, and Consent in which she consented to the described sanctions, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority's (FINRA) findings that she exercised discretion when she made trades in customer accounts after receiving the customers' consent to make the trades anywhere from several days to two months before placing each trade. The findings stated that Ms. Chen also exercised discretion in customer accounts in the absence of having received any order for a definite amount of a specified security. For all the discretionary trades, Ms. Chen failed to obtain the customers' prior written authorization or her firm's prior written acceptance of the accounts as discretionary. During the relevant period, the firm prohibited discretionary trading in these types of customer accounts. Ms. Chen, of Houston, Texas, was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. The suspension was in effect from August 19, 2013 through August 30, 2013.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses due to unauthorized trades by their broker can bring forth claims to recover damages against broker-dealers like Ameriprise Financial Services, Inc., which should consistently oversee its brokers' activities in order to prevent the above-described prohibited conduct.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.