The Financial Industry Regulatory Authority suspended a former Raymond James broker for 10 days and fined him $5,000 after he exercised discretion in a client’s account without written authorization and then didn’t answer truthfully about it in two of the firm’s annual compliance questionnaires, according to FINRA.
Stephen Paul Florio signed a letter of acceptance, waiver and consent last month in which, without admitting or denying FINRA’s findings, he agreed to the suspension and fine. FINRA accepted the letter Thursday.
Raymond James and David A. Weintraub, an attorney who represented Florio in the dispute, did not immediately respond to requests for comment on Friday.
Florio was registered as a general securities representative through an association with Raymond James from 1994 until 2003, when he left to join Bank of America and then Morgan Stanley, before rejoining Raymond James in June 2015, according to FINRA’s BrokerCheck website and the AWC letter.
However, on Aug. 31, 2018, Raymond James filed a Form U5 notice of termination for Florio disclosing that he had been discharged Aug. 2, 2018, according to FINRA.
The rep was terminated after Raymond James “identified emails suggesting involvement with an unapproved outside business activity,” according to a disclosure on his BrokerCheck report.
The firm was also “concerned about [Florio’s] investments in low-priced securities about which he was in frequent communications with an individual with direct contacts with senior management,” according to the disclosure. The rep denied any outside business activity and asserted he never had access to or receipt of nonpublic information for any securities, it added.
FINRA started an investigation after receiving the Form U5, according to the AWC letter.
From Jan. 5, 2016 through July 10, 2018, Florio exercised discretion in a customer’s account, the AWC letter said. “Due to the customer’s business and travel schedule, the customer orally authorized Florio to exercise discretion in the account,” the letter said.
“Florio, however, did not have the customer’s written authorization to exercise discretion, nor was the account approved for discretion by Raymond James,” according to FINRA.
Florio then “incorrectly answered ‘No’ when asked, in two Raymond James annual compliance questionnaires, whether he exercised discretion in any customer’s account,” FINRA said.
He is currently a rep for Cambridge Investment Research in Fort Lauderdale, Florida, according to BrokerCheck.