David Francis Dalton of Boston Massachusetts a stockbroker formerly employed by Moors Cabot Inc. has been fined $7,500.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on findings that (1) the stockbroker executed trades in customer accounts on a discretionary basis without getting approval by both customers and Moors Cabot and (2) Dalton caused Moors Cabot to retain false records in regard to his solicitation of securities purchases or sales in customer accounts. Letter of Acceptance Waiver and Consent No. 2020065196802 (Feb. 12, 2020).
According to the AWC, throughout the time that Dalton was associated with Moors Cabot, he was prohibited under the firms’ supervisory procedures from exercising discretion in customer accounts. Unless both the customers and the securities broker dealer approved accounts for discretionary trading, stockbrokers were required to first obtain permission from clients on days that trades would be effected in their accounts.
The AWC stated that Davis and his partner at Moors Cabot effected more than 11,500 trades in at least 221 accounts of the securities broker dealer’s customers. Neither Dalton nor his partner possessed the necessary written authorization to engage in discretionary trading. Without consulting with customers and obtaining their permission, trades were effected in their accounts by Dalton and his partners.
Dalton had been administered compliance questionnaires by Moors Cabot in regard to discretionary trading. The AWC stated that with respect to three of these compliance questionnaires that Dalton completed and submitted to the firm, false statements were made by him concerning discretionary trading. Dalton’s conduct was violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
The AWC indicated that false records or books had been maintained by Moors Cabot in regard to Dalton’s trading. Dalton was required under the securities broker dealer’s written supervisory procedures to furnish information pertaining to his trades. The AWC stated that Dalton failed to reference that he exercised discretion in customer accounts which caused trades to be construed as solicited by customers. FINRA found that Dalton violated FINRA Rules 4511 and NASD Rule 3110 through causing Moors Cabot to hold inaccurate order information.
Dalton was registered with Moors Cabot between February 15, 2002 and January 4, 2020.
