Paul Frederick Valencia, of Temecula, California, a stockbroker with World Equity Group, Inc., was fined $5,000.00 and suspended for ten business days from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he engaged in unauthorized discretionary trading in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2014040655501 (Apr. 25, 2016).
According to the AWC, from October 2009 through September 2012, Paul Valencia had exercised unauthorized discretionary trading in a security account belong to a firm customer. Although Valencia had received verbal approval from the client to make certain trades of securities, this approval was not applicable (nor within his firm’s allowable rules) to enable Valencia to place trades on future dates. Apparently, Valencia made four transactions on a discretionary basis on such future dates.
The AWC stated that Valencia never received any written approval from the firm’s client that would enable him to trade, on a discretionary basis, in the customer’s account. Additionally, his firm had not authorized Valencia’s trading in this regard. FINRA found that Valencia’s conduct was violative of FINRA Rule 2010, as well as NASD Conduct Rule 2510(b).
Public disclosure records reveal that Valencia has been subject to four disclosure incidents. On May 2, 1990, Valencia settled a customer dispute for $64,500.00 after a client alleged lack of suitability, unauthorized trading, fraud, and breach of fiduciary duty. On January 2, 2002, Valencia settled a customer dispute for $125,000.00 after a client alleged unauthorized trading occurring in her account, resulting in customer losses.
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