Allegations of financial misconduct are a serious matter, carrying significant implications for both financial advisors and their clients. One such case currently under investigation involves John Pelletier, a financial advisor with BMO Harris Financial Advisors, Inc. and LPL Financial LLC. The allegation is a grave one: unauthorized trading in a customer’s Individual Retirement Account (IRA).
The Seriousness of the Allegation
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Pelletier is accused of executing trades with a total principal value of $37,799 without obtaining the necessary authorization or consent. These unauthorized trades were allegedly performed at the sole instruction of the customer’s ex-wife, who was not an authorized party on the account. The customer, a 62-year-old retiree, was the sole owner of the IRA and the only person authorized to direct trades in the account.
Each unauthorized trade involved selling one of two classes of shares of a mutual fund holding in the customer’s account to fund a redemption and distribution. It is alleged that Pelletier chose which class of mutual fund to sell without obtaining the customer’s approval or consent.
Understanding the Allegation and the FINRA Rule
In simple terms, unauthorized trading refers to a situation where a financial advisor executes trades without the necessary authorization or consent from the client or an authorized person. This is a clear violation of the Financial Industry Regulatory Authority (FINRA) Rule 2010, which requires financial advisors to observe high standards of commercial honor and just and equitable principles of trade.
By allegedly executing trades without the customer’s consent, Pelletier may have violated this rule. It’s important to note that these are still allegations, and the case is pending regulatory review.
Why This Matters for Investors
This case serves as a crucial reminder of the importance of vigilance and active involvement in one’s financial matters. Unauthorized trading can lead to financial losses and disrupt carefully laid investment plans. It also undermines the trust between investors and their financial advisors, which is a fundamental aspect of the financial advisory relationship.
Investors need to be aware of their rights and the regulations that protect them. In cases of unauthorized trading, FINRA Arbitration can help investors recover losses.
Red Flags and Recovery of Losses
Investors should be aware of potential red flags for financial advisor malpractice. These include unauthorized trades, unexplained losses, and changes in account holdings. Regular review of account statements and maintaining open communication with your financial advisor can help detect any irregularities early.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company. They offer free consultations to clients and have over 50 years of experience in the field. With a remarkable 98% success rate, they’ve successfully recovered financial losses for investors across the country. Their “No Recovery, No Fee” policy further assures clients that they are dedicated to their cause.
Investors who believe they may have been victims of unauthorized trading or other financial malpractice can reach out to Haselkorn & Thibaut at their toll-free consultation number, 1-800-856-3352.
In conclusion, allegations of financial misconduct, such as the one involving John Pelletier, are serious matters that warrant careful attention. Investors are encouraged to stay vigilant, understand their rights, and seek professional help when necessary.
