Ethan De Naray of Minneapolis Minnesota a stockbroker formerly employed by Merrill Lynch Pierce Fenner Smith Inc. has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he improperly exercised discretion in customer accounts and mismarked customer order tickets. Letter of Acceptance Waiver and Consent No. 2017053586401 (Aug. 3, 2018).
According to the AWC, between January of 2016 and February of 2017, during the time that Naray was associated with Merrill Lynch, Naray placed at least one hundred trades in a Merrill Lynch customer’s two accounts. Those trades were apparently effected on a discretionary basis; however, the customer never provided Naray with written authorization to effect the transactions. Further, Naray failed to obtain permission from the firm for the investment accounts to be labeled as discretionary. Consequently, FINRA found Naray’s conduct violative of FINRA Rule 2010 and NASD Rule 2510(b).
The AWC also revealed that recommendations were made by Naray for a customer to buy put options during a period that the underlying security had contained a buy rating from Merrill Lynch. The policies of the firm reportedly disallowed securities from being transacted upon if they were contrary to the firm’s sell or buy rating. Consequently, Naray was disallowed from recommending that a customer buy the put option.
Naray reportedly attempted to circumvent the firm’s restriction buy incorrectly marking three order tickets concerning purchases of put options. FINRA concluded that Naray’s marking of the order as unsolicited, when the order had been solicited, caused the records and books of Merrill Lynch to be inaccurate. Consequently, FINRA found Naray’s conduct violative of FINRA Rules 2010 and 4511.
FINRA Public Disclosure reveals that Naray is the subject of a customer initiated investment related written complaint that was resolved on May 11, 2017 for $92,000.00 in damages founded on accusations that between June of 2016 and February of 2017, Naray executed options and stock transactions in the customer’s account without the customer’s authorization.
Naray was ultimately discharged from Merrill Lynch on May 19, 2017 supported by allegations that he effected trades on a discretionary basis in customer accounts that were not authorized for that purpose, and mismarked trades as having been unsolicited. Since July 19, 2017, Naray has been registered with Feltl & Company.
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