The seriousness of allegations against a financial advisor should never be underestimated, as it can have significant impacts on both the advisor and their clients. Recently, a case has come to light involving Anthony Cross, a broker and investment advisor associated with The O.N. Equity Sales Company and currently with MML Investors Services, LLC (CRD 10409). According to the Financial Industry Regulatory Authority (FINRA), Cross has been accused of exercising discretionary authority to effect trades in customer accounts without obtaining written authorization from the customers and without his member firm having accepted the accounts as discretionary.
The Allegation’s Seriousness and Case Information
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On 9/5/2023, without admitting or denying the findings, Cross consented to the sanctions and to the entry of findings by FINRA. The findings stated that although the customers understood that Cross was placing trades in their accounts, none of them had given him prior written authorization to exercise discretion, and Cross did not speak with the customers on the dates of the trades. The seriousness of these allegations cannot be overstated, as they involve a breach of trust and potential financial harm to the customers involved.
As a result of these allegations, Cross faced sanctions, including a civil and administrative penalty of $5,000 and a suspension affecting all capacities for 20 calendar days, from 10/2/2023 to 10/21/2023. This case is listed under the FINRA CRD number 3155726.
Explanation in Simple Terms and the FINRA Rule
In simple terms, Cross was accused of making trades in customer accounts without their explicit written permission. This is a serious violation of FINRA rules, which require brokers to obtain written authorization from their clients before making discretionary trades. Discretionary trading involves making investment decisions on behalf of a client without consulting them on each trade. This practice is heavily regulated to protect investors from potential abuse or fraud.
The rule Cross allegedly violated is part of the Acceptance, Waiver & Consent (AWC) regulations under FINRA. These rules are designed to ensure that brokers and investment advisors act in the best interests of their clients and maintain open and honest communication.
Why it Matters for Investors
Allegations like these are crucial for investors to be aware of, as they highlight potential risks associated with entrusting their money to financial advisors. When an advisor makes unauthorized trades, they are not only potentially risking the investor’s money, but they are also breaking the trust that is vital to the advisor-client relationship.
Investors rely on their advisors to act in their best interests, and when that trust is broken, it can lead to significant financial and emotional distress. It’s essential for investors to remain vigilant and informed about the actions and integrity of their financial advisors.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
Some red flags that may indicate financial advisor malpractice include unauthorized trading, excessive trading, lack of communication, and consistent losses. Investors should always monitor their accounts closely and report any suspicious activity immediately.
Investors who believe they have been victims of financial advisor malpractice can seek help from FINRA Arbitration, a dispute resolution process that is quicker and less formal than litigation. It’s also important to seek legal counsel from a reputable investment fraud law firm, such as Haselkorn & Thibaut.
Haselkorn & Thibaut is a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas. With over 50 years of experience, the firm boasts a 98% success rate in recovering losses for investors. They offer free consultations and operate on a “No Recovery, No Fee” policy. To get in touch, call their toll-free consultation number at 1-800-856-3352.
Haselkorn & Thibaut is currently investigating the allegations against Anthony Cross and his associated companies. If you have been affected by this case or similar cases, don’t hesitate to reach out for a free consultation.
