Richard Hiroyuki Yada of Little Rock Arkansas a stockbroker formerly registered with LPL Financial LLC has been fined $5,000.00 and suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in unauthorized trading in customer accounts. Letter of Acceptance Waiver and Consent No. 2017053623901 (Sept. 4, 2018).
According to the AWC, between January 1, 2009 and December 31, 2016, during the time that Yada was associated with LPL Financial, he traded in twelve LPL accounts on a discretionary basis. Yada’s trading apparently lacked authorization from customers, and the firm never authorized it because it never approved the customer accounts for purposes of discretionary trading.
The AWC revealed that Yada exercised discretionary power in a trading strategy involving purchases and sales of stock in the customers’ accounts. Apparently, Yada would stagger his purchases of the stocks and sell positions when prices dropped by at least fifteen percent from the price that the stocks had been purchased. The AWC stated that Yada’s trading strategy caused several hundred trades to be effected on a discretionary basis between January 1, 2009 and December 31, 2016.
The AWC further detailed that Yada persisted in trading on a discretionary basis even though he had confirmed with the firm’s compliance questionnaires his understanding of the firm’s prohibition of discretionary trading. Evidently, when Yada was probed by his firm about engaging in discretionary trading, Yada denied having exercised discretion in customer accounts.
Evidently, FINRA learned of Yada’s activities after a customer had complaint about his trading practices. Yada later admitted to having executed the unauthorized transactions after an investigation was commenced by FINRA into his trading practices. FINRA found that Yada’s conduct was violative of FINRA Rule 2010 and NASD Conduct Rule 2510(b).
FINRA Pubic Disclosure confirms that on August 16, 2017, a customer filed an investment related complaint regarding Yada’s conduct in which the customer requested $170,000.00 in damages based upon accusations of excessive and unauthorized trading of over-the-counter equities in the customer’s account while Yada was associated with LPL Financial.
On February 17, 2017, Yada was discharged from LPL Financial founded on allegations that he violated the firm’s policies by using discretion in the customer’s investment accounts to place stock transactions.
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