James G. Christianson from Portland, Oregon a Stockbroker with Wells Fargo Advisors, LLC, was suspended for fifteen days from association with all Financial Industry Regulatory Authority (FINRA) members and fined $10,000 after consenting to findings that he exercised discretion in three accounts of a customer without obtaining written authorization from the customer and without written acceptance by his firm. Letter of Acceptance, Waiver and Consent, No. 2012034397901 (Oct. 16, 2015). Public disclosure records reveal that Wells Fargo discharged Christianson after Christianson admitted to not speaking with his client regarding his transactions.
According to the AWC, from July 2011 through November 2012, Christianson had effected approximately eight hundred and twenty-two purchases/sales of securities in three accounts of a firm customer. The customer was reportedly an entity that had authorized three select individuals to approve transactions for accounts. The AWC indicated that Christianson failed to discuss more than half of the transactions with the authorized individuals prior to placing them.
The AWC further indicated that Christianson had never been granted any written authority allowing for his conduct. Further, the Firm did not permit its Stockbrokers, such as Christianson, to exercise discretion in customer accounts during the time period that the transactions took place. Accordingly, none of the accounts were ever accepted by his firm as discretionary accounts. FINRA found that Christianson’s conduct of exercising discretionary power in customer accounts without obtaining authorization from customer(s) or written acceptance by his firm was violative of NASD Rule 2510 and FINRA Rule 2010.
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.
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, Esquire, 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.
