Scott Richard Riley of Hooksett New Hampshire a stockbroker formerly employed by Edward Jones has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Riley exercised discretion in customer accounts without having any written authorization (2) Riley executed trades without customers’ consent. Letter of Acceptance Waiver and Consent No. 2017055611501 (Aug. 19, 2019).
According to the AWC, in June 2017, FINRA launched an investigation into Riley after Edward Jones revealed to FINRA that it terminated Riley’s registration. FINRA discovered that mutual fund positions were been sold improperly by Riley from a customer’s investment account. The AWC stated that the proceeds of this improper mutual fund sale had been utilized for purposes of effecting another mutual fund purchase. Riley possessed no written authorization from the customer to warrant these transactions so FINRA found his conduct violative of FINRA Rule 2010.
The AWC additionally revealed that from July 2014 to July 2017, eighteen customer accounts contained transactions which had been executed by Riley on a discretionary basis. Riley failed to receive any written authorization to support his exercise of discretion. Moreover, the eighteen customer accounts had not been accepted by Edward Jones for purposes of any discretionary trading on Riley’s part.
The AWC stated that Riley was subject of an Edward Jones internal review in which Riley claimed not to have made any trades in a manner which violated policies on discretionary trading. He later confessed to having exercised discretion without written authorization.
