Edmond J. Harris, a registered representative with Ladenburg Thalman & Co. Inc., was permanently barred from association with any Financial Industry Regulatory Authority (FINRA) member firm after consenting to findings that Harris failed to cooperate with an investigation into allegations that Harris engaged in improper discretionary trading in client accounts. Letter of Acceptance, Waiver, and Consent No. 2014043428601 (Sept. 17, 2015).
According to the AWC, FNRA sent a letter to Harris on February 2, 2015, requesting that he provide information to assist FINRA in their investigation into allegations of Harris’ misconduct, pursuant to Rule 8210. The AWC indicated that Harris never responded to FINRA’s request.
The AWC stated that FINRA sent Harris another request to provide information on March 18, 2015. Harris, according to the AWC, finally spoke with FINRA’s staff on March 24, 2015, where Harris acknowledged that he received FINRA’s requests to provide documentation, but that he would not be cooperating at any point. FINRA, according to the AWC, made a final request for information on July 15, 2015, where Harris contacted FINRA’s staff to indicate he would not comply. FINRA therefore found Harris to have violated FINRA Rules 8210 and 2010 as a result, leading to Harris’ permanent bar.
By definition, a broker is liable for making unauthorized trades without the customer’s prior authorization. Absent written discretion, it is a violation of Section 10(b) of the Exchange Act, and Rule 10b-5, as promulgated thereunder, to effect transactions in customer accounts without their prior authorization or consent.
Customers also have a duty to review securities purchase and sale confirmations and review their securities accounts. If a stockbroker has placed unauthorized transactions in a customer account, the customer under most circumstances has a duty to act, or a duty to complain, or else generally, the customer may be deemed to have ratified these transactions, with actual or imputed knowledge, by doing nothing. Under such circumstances, a customer’s damages may be limited to the time they knew or should have known about the unauthorized transactions.
FINRA registered representatives like Harris who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and equitable principles of trade.
Public disclosure records via FINRA’s BrokerCheck reveal that Harris has been subject to six disclosure events. On November 11, 1987, a customer dispute was settled for $17,000.00 after a customer claimed that Harris engaged in unsuitable activity. On June 19, 1989, a customer was awarded $225,000.00 after claiming account related breach of contract, breach of fiduciary duty, conversion, and unauthorized transactions. On May 11, 1990, Harris settled a customer dispute for $70,000.00 after claims of unsuitable/excessive transactions. On February 4, 2010, a customer dispute was settled for $22,500.00 after a customer claimed fraud, negligent misrepresentation, breach of fiduciary duty, breach of good faith and fair dealing, excessive use of margin, lack of suitability, respondeat superior and negligent supervision.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
