James P. Hilty, Jr., from Ocala, Florida, as stockbroker for Edward Jones, was fined $5,000.00 and suspended for forty-five days from association with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he engaged in unauthorized discretionary trading. Letter of Acceptance, Waiver and Consent, No. 2014041875801 (Jan. 29, 2016).
According to the AWC, from August 2013 through May 2014, three customer accounts contained transactions effected by Hilty, despite Hilty not having the written authorization obtained prior to doing so. The AWC reported that fourteen trades were executed in the accounts of three customers. In all circumstances, the customers were reportedly not notified, but only spoke to Hilty prior to his engagement about investment strategies.
The AWC stated that customers were never conferred with Hilty regarding the actual trades and that Hilty had not even corresponded with the clients on trade dates. The Company’s policy, according to the AWC, prohibited stockbrokers like Hilty from utilizing discretion in the accounts of customers unless such discretion was based upon time and price. The accounts were reportedly unapproved for discretionary trading and resulted in Edward Jones subsequently cancelling the transactions.
Public disclosure records via FINRA’s BrokerCheck reveal that on June 24, 2014, Edward Jones had terminated Hilty amid allegations that he violated the firm’s discretionary trading policy, violated the firm’s human resources e-mail correspondence policy, and caused certain clients to violate Regulation T. FINRA found that Hilty had violated FINRA Rule 2010 and NASD Rule 2510(b) as a result of his discretionary trading.
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