Robert C. Marrone, a registered representative with Morgan Stanley, was permanently barred form association with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to FINRA findings that Marrone failed to cooperate in an investigation into allegations that Marrone engaged in unauthorized trading and discretion without authorization in client accounts. Letter of Acceptance, Waiver, and Consent No. 2014042204201 (Sept. 16, 2015). Public disclosure records reveal that Marrone was terminated (discharged) from Morgan Stanley on July 11, 2014, amid concerns regarding the use of discretion in several client accounts.
According to the AWC, FNRA sent a letter to Marrone on June 12, 2015, requesting he provide information to FINRA, per Rule 8210, to assist FINRA in their investigation into allegations of Marrone’s misconduct. The AWC indicated that Marrone never responded to FINRA’s request.
The AWC stated that FINRA sent Marrone another request to provide information on June 30, 2015, but that Marrone again failed to respond to FINRA. Marrone, according to the AWC, finally spoke with FINRA’s staff on August 4, 2015, where he acknowledged that he received FINRA’s requests to provide documentation, but that he would not be cooperating at any point. FINRA found Marrone to have violated FINRA Rules 8210 and 2010 as a result, leading to Marrone’s 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 Marrone 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.
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.
