Close Close
ThinkAdvisor

Regulation and Compliance > Federal Regulation > FINRA

Advisor Suspended for Trades Requested by Client's Mom

By Jeff Berman

X
Your article was successfully shared with the contacts you provided.
FINRA sign outside its office in New York. Outside FINRA’s office in New York. (Photo: Shutterstock)

The Financial Industry Regulatory Authority has suspended and fined a former Cetera Financial Group advisor for allegedly making transactions in a client’s account at the request of the client’s mother, according to FINRA.

Without admitting or denying the allegations, John D. Craft signed a FINRA letter of acceptance, waiver, and consent  earlier this month, agreeing to a $5,000 fine and a two-month suspension from associating with any FINRA member in any capacity. FINRA signed the letter Wednesday.

Craft’s FINRA BrokerCheck record includes a disclosure in which Cetera states it terminated him June 11, 2019 “after receiving a demand for payment [that] was made pursuant to a client complaint.”

The registered broker is currently serving as a rep for Trustmont Financial Group, according to BrokerCheck.

More Details

From October 2016 through February 2018, “Craft violated FINRA Rule 2010 by effecting transactions in a customer’s individual retirement account (IRA) based on instructions he received from the customer’s mother, who was not authorized to direct transactions in the customer’s account,” FINRA alleged.

“Craft executed seven trades, with a total value of approximately $20,333,” according to FINRA. The trades “included three stock sales liquidating all investments in the customer’s IRA in February 2018, which generated approximately $10,000 in proceeds that were distributed out of the account,” FINRA claimed.

However, there was a problem: “Craft did not obtain the customer’s prior authorization for the trades or a power of attorney authorizing the customer’s mother to direct trading in the customer’s IRA,” FINRA alleged.

Cetera declined to comment on the matter Friday.

Jeff Berman

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.