Frederick D. Houck, of Brookfield, Wisconsin, a stockbroker formerly registered with Freedom Investors Corp., has been suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected unauthorized trades in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2016049678601 (Aug. 28, 2017).
According to the AWC, between August of 2011 and September of 2015, a total of four-hundred and ninety-one trades were effected in customer accounts by Houck on a discretionary basis. Apparently, the trades were consummated as part of Houck’s recommended strategy for investment, but were effected despite customers never having granted Houck the authority to exercise discretion in their accounts.
The AWC revealed that Freedom Investors Corp. also never authorized Houck’s activities. Evidently, the firm required that Houck certify that he understood the firm’s standards of conduct, which proscribed the exercise of discretion in customer accounts. Houck reportedly affirmed that he would abide by the firm’s policies even though his activities dictated otherwise. FINRA found that Houck’s conduct in that regard was violative of FINRA Rule 2010 and NASD Rule 2510(b).
FINRA Public Disclosure reveals that on February 29, 2016, a customer filed an investment related arbitration claim involving Houck’s conduct, where the customer requested $150,000.00 in damages supported by accusations that from August of 2011 to January of 2016, Houck breached his fiduciary duties, effected excessive trades, negligently managed the customer’s investment portfolio, and churned the customer’s account.
Houck’s registration with Freedom Investors Corp. was terminated on June 10, 2016.
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