Florida Broker Fined, Suspended By FINRA for Improper Use of Discretion in Customer Account

Glenn Allen Donnell (CRD #2239397) is a registered broker. From 1998 to 2020, Mr. Donnell was a representative of Investacorp in Crystal River, Florida. Subsequently, the broker was also associated with Securities America, Inc. and Sigma Financial Corporation—also in Crystal River. Mr. Donnell has been fined and suspended for improperly exercising trading discretion in the non-discretionary account of an investor. Within this article, our Miami FINRA arbitration lawyer discusses the enforcement action and regulations.

FINRA Enforcement Action: Glenn Allen Donnell Formerly of Several Florida Brokerage Firms

The Financial Industry Regulatory Authority (FINRA) took enforcement action against broker Glenn Allen Donnell after he was accused of improperly exercising trading discretion in the accounts of 11 different clients. Notably, the alleged FINRA violation took place over the court of three years and while Mr. Donnell was a registered representative of three different brokerage firms (Investacorp, Securities America, Inc., and Sigma Financial Corporation).

Broker Sanctions: Fine and Suspension

Without admitting to or denying any of the specific allegations raised against him, Mr. Donnell consented to FINRA’s proposed penalties. Specifically, the self-regulatory body issued a fine of $12,500 and suspended the broker from the securities industry for four months. That suspension will last until December 16th, 2024.

 An Overview of the Relevant FINRA Regulations (FINRA Rule 3260) 

Discretionary trading refers to transactions executed by a broker on behalf of a client without the client’s prior specific approval of each individual transaction. Brokerage accounts are split into two broad categories: Discretionary accounts and non-discretionary accounts. If you have a non-discretionary account, your broker has to get express permission for every individual transaction/trade. FINRA Rule 3260 sets the regulations for discretionary trading. Here is an overview of the key things investors should understand about the specific of the regulation:

• FINRA Rule 3260(a): FINRA Rule 3260(a) holds that before exercising discretion in a customer’s account, a broker must first receive express written authorization from the client. Beyond that, the brokerage firm must have approved the account for discretionary trading. The rule is designed to ensure a formal understanding and agreement between the client and the firm regarding the handling of the account. A formal agreement is required.
• FINRA Rule 3260(b): FINRA Rule 3260(b) holds that discretion can only be exercised in a manner consistent with the client’s objectives and financial situation. Put another way any discretionary decisions made by the broker should align with the investment goals, risk tolerance, and financial conditions outlined by the client. The broker must also ensure that all discretionary trades are conducted in a reasonable manner that is consistent with what the investor would want given the circumstances.

 Consult With Our Miami Securities Losses Attorney Today

At ​Carlson & Associates, P.A., our Miami securities losses lawyer is standing by, ready to fight for your rights. If you suffered significant financial losses because your broker improperly authorized trading discretion in your brokerage account, we are here to help. Contact our legal team today for your confidential case review.

Source:

brokercheck.finra.org/individual/summary/2239397