John Jacobs, a broker and investment advisor associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD 7691), is currently facing allegations of theft of funds and unauthorized trading from a client. The customer dispute, filed on January 20, 2024, is currently pending resolution and involves equity listed products (common & preferred stock). The details of the alleged damages and any potential settlement remain undisclosed at this time.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating John Jacobs and Merrill Lynch, Pierce, Fenner & Smith Incorporated in relation to these allegations. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of successfully recovering losses for investors. They offer free consultations to clients and operate on a “No Recovery, No Fee” policy. Investors can reach out to them for a consultation by calling their toll-free number at 1-888-885-7162 .
Understanding the allegations and FINRA rules
Table of Contents
Theft of funds and unauthorized trading are serious violations of FINRA (Financial Industry Regulatory Authority) rules. FINRA Rule 2150 prohibits the improper use of customer funds or securities, stating that no member or associated person shall make improper use of a customer’s securities or funds. Additionally, FINRA Rule 2010 requires that members observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
Unauthorized trading occurs when a broker executes trades in a client’s account without obtaining prior consent. This violates FINRA Rule 2010 and may also violate other rules, such as FINRA Rule 2111, which requires brokers to have a reasonable basis for believing that a recommended transaction or investment strategy is suitable for the customer. Unauthorized trading is a common form of investment fraud that can lead to significant financial losses for investors.
The impact on investors
Allegations of theft and unauthorized trading can have severe consequences for investors. Unauthorized trades may result in significant financial losses, as the investments may not align with the client’s risk tolerance, investment objectives, or financial situation. Theft of funds, on the other hand, directly impacts an investor’s account balance and can lead to substantial losses.
Investors who have fallen victim to such misconduct may face emotional distress and financial hardship. It is crucial for affected investors to be aware of their rights and the steps they can take to recover their losses.
Recognizing red flags and seeking help
Investors should be vigilant in monitoring their investment accounts and be aware of potential red flags that may indicate misconduct by their financial advisor. Some warning signs include:
- Unauthorized transactions on account statements
- Unexplained or significant losses
- Lack of communication or evasive behavior from the advisor
- Inconsistencies between verbal discussions and actual trades
If investors suspect that they have been a victim of theft or unauthorized trading, they should promptly report their concerns to their brokerage firm’s compliance department and consult with an experienced investment fraud attorney. FINRA arbitration provides a means for investors to recover losses caused by broker misconduct.
Haselkorn & Thibaut offers free consultations to investors who believe they may have been victims of investment fraud. Their experienced attorneys can help investors navigate the FINRA arbitration process and work towards recovering their losses. Contact them today at 1-888-885-7162 to discuss your case and learn more about your legal options.
