Florida Broker Fined, Suspended For Improperly Authorizing Discretion In Customer Account
John Charles Barnes (CRD #862738) is an actively registered FINRA broker and registered investment adviser (RIA). Since 2019, Mr. Barnes has served as a financial representative of Wilmington Capital Securities, LLC in Naples, Florida. Previously, he was associated with RBC Capital Markets, LLC (2006 to 2019), also in Naples, FL.
In September of 2022, the Financial Industry Regulatory Authority (FINRA) announced enforcement action against John Charles Barnes. He was fined $5,000 and suspended for 30 days for improperly exercising discretion within written authorization. Here, our Miami unauthorized trading lawyer provides an overview of the FINRA enforcement action taken against this broker.
Broker Sanctions: John Charles Barnes Formerly of RBC Capital Markets, LLC
On April 8th, 2019, John Charles Barnes was separated from his employment at RBC Capital Markets, LLC after allegations of misconduct. FINRA launched its own investigation into the alleged misconduct. The relevant review period in this case runs from May of 2016 through March of 2019. During that time, FINRA determined that Mr. Barnes improperly exercised discretion in the brokerage accounts of nine customers. In total, he completed 432 trades.
Under FINRA regulations, there are two types of brokerage accounts: 1) Discretionary accounts and 2) Non-discretionary accounts. Brokers and RIAs are strictly prohibited from exercising any trading discretion within a customer’s non-discretionary account. With those types of accounts, an investor must approve every specific transaction. An account can only qualify as a discretionary account if the customer provides express written authorization.
FINRA Findings: Implied Discretion Was Provided, Not Written Authorization
In this case, FINRA notes that the customers in question—nine customers of RBC Capital Markets, LLC—had only given John Charles Barnes “implied” authorization to trade within their account. Securities industry rules are clear: Implied authorization is not sufficient. A broker can only exercise discretion within a trading account of a customer if he or she has received express written authorization to do so. This rule is designed to help protect investors against the potential risk of financial losses caused by unauthorized trading. FINRA cited Mr. Barnes for a violation of FINRA Rule 2010, which requires all registered representatives to uphold high standards of commercial honor.
An Overview of the Broker Penalties: Fine and Suspension
Without admitting to or denying wrongdoing in the proceedings, former RBC Capital Markets, LLC broker John Charles Barnes consented to FINRA’s proposed penalties. He accepted a $5,000 fine and a 30 day suspension from the securities industry. As of early November of 2022, Mr. Barnes has been reinstated to the securities industry.
Contact Our Miami Unauthorized Trading Attorney Today
At Carlson & Associates, P.A., our Florida securities fraud lawyer has the experience to handle the full range of unauthorized trading claims. If your broker improperly authorizes discretion in your non-discretionary brokerage account, we are here to help. Contact us today to set up a completely confidential case review. From our Miami office, our firm represents investors throughout the area, including in Miami-Dade County, Broward County, and Palm Beach County.
Source:
brokercheck.finra.org/individual/summary/862738