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Joseph Yanofsky, of Greenwood Village, Colorado, a stockbroker formerly registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated, has been fined $10,000.00 and suspended 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. 2015045664601 (Sept. 5, 2017).

According to the AWC, from May of 2012 and May of 2015, discretion had been exercised by Yanofsky in the accounts of nine Merrill Lynch customers even though Yanofsky’s activities were not consented to in writing. Apparently, his transactions pertained to syndicate equity offerings that were in high demand by customers. The AWC stated that customers communicated an interest in investing through syndicate offerings; however, they never provided written authorization for Yanofsky’s transactions. The customers’ accounts were also not approved by the firm to allow representatives to exercise discretion.

Moreover, the AWC stated that in some of the customers’ cases, Yanofsky effected syndicate offering transactions that were never discussed with them beforehand. Ultimately, FINRA concluded that Yanofsky’s unauthorized trading amounted to violations of FINRA Rule 2010 and NASD Rule 2510(b).

Yanofsky was also cited in the AWC for leading the firm to hold records and books that were not accurate. Apparently, Yanofsky instructed a staff member to place syndicate offering orders using another registered representative’s identification for purposes of entering many orders at the same time. FINRA found that Yanofsky’s conduct in that regard was violative of FINRA Rules 2010 and 4511(a).

FINRA Public Disclosure reveals that Yanofsky has been subject of eight customer initiated investment related disputes concerning allegations of his misconduct while employed with Merrill Lynch, E.F. Hutton & Co., Inc., and Paine Webber. Specifically, on June 17, 2015, a customer filed an investment related written complaint regarding Yanofsky’s activities, in which the customer requested $455,000.00 in damages supported by accusations that Yanofsky traded closed-end funds without the customer’s permission and failed to abide by the customer’s instructions.

Subsequently, on October 28, 2015, a customer initiated investment related written complaint involving Yanofsky’s conduct was settled for $35,000.00 in damages based upon accusations that Yanofsky effected unauthorized closed-end fund trades in the customer’s account. On July 1, 2016, another customer initiated investment related arbitration claim regarding Yanofsky’s activities was resolved for $75,000.00 in damages founded on allegations that Yanofsky made misrepresentations as well as unsuitable recommendations to the customer regarding investments in mutual funds. Yanofsky has additionally been subject of a customer initiated investment related written complaint on August 27, 2016 formed by accusations of unauthorized mutual fund trades having been placed by Yanofsky in the customer’s investment account.

Yanofsky was terminated from Merrill Lynch on May 1, 2015, based upon allegations of his unauthorized trading and failure to be forthcoming in an investigation into his misconduct. Since June 30, 2015, he has been associated with First Financial Equity Corporation.

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