Merrill Lynch and one of its financial advisors, Joseph Bowden, are facing allegations of unauthorized trading and failing to act in a client’s best interest. The alleged misconduct occurred between December 14, 2023, and January 31, 2024, involving managed and wrap accounts handled by the in-house money manager.
According to the customer dispute filed on January 31, 2024, the client accused Joseph Bowden of engaging in unauthorized trades and not prioritizing their financial well-being during the specified period. The complaint was denied by Merrill Lynch, and the damage amount requested by the client has not been disclosed.
Joseph Bowden has been registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD 7691) in Florida as a broker and investment advisor since January 25, 2010. He is currently employed by the firm and maintains both his broker and investment advisor registrations.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Joseph Bowden and Merrill Lynch regarding these allegations. The firm encourages any clients who may have suffered losses due to the alleged misconduct to contact them for a free consultation by calling their toll-free number at 1-888-885-7162 .
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Forbes article, investment fraud often involves the promise of high returns with little to no risk, which should be a red flag for investors. It is crucial for investors to thoroughly research their financial advisors and the investments they recommend to protect their financial well-being.
Understanding Unauthorized Trading and FINRA Rules
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Unauthorized trading occurs when a financial advisor executes trades in a client’s account without obtaining prior consent or authorization. This practice violates FINRA Rule 2010, which requires registered representatives to observe high standards of commercial honor and just and equitable principles of trade.
Additionally, FINRA Rule 3260 specifically addresses discretionary accounts and requires financial advisors to obtain written authorization from clients before exercising discretion in their accounts. This rule ensures that clients are fully aware of and consent to any trades made on their behalf.
By engaging in unauthorized trading, financial advisors breach the trust placed in them by their clients and expose them to potential financial harm. Such misconduct can result in disciplinary action by FINRA and legal consequences.
The Impact on Investors
Unauthorized trading can have severe consequences for investors, as it exposes them to unintended risks and potential financial losses. When a financial advisor executes trades without the client’s knowledge or consent, the client loses control over their investment strategy and may end up with a portfolio that does not align with their goals and risk tolerance.
Moreover, unauthorized trades can generate excessive transaction costs, eroding the client’s returns over time. In some cases, financial advisors may engage in excessive trading or churning to generate higher commissions for themselves at the expense of their clients.
Investors who have fallen victim to unauthorized trading may suffer significant financial losses, as well as emotional distress and a loss of trust in the financial industry. It is crucial for affected investors to seek legal guidance to protect their rights and explore options for recovering their losses.
Red Flags and Recovering Losses
Investors should be vigilant for red flags that may indicate financial advisor malpractice, such as unauthorized trading. Some warning signs include:
- Unexpected or unexplained trades in their account statements
- Trades that do not align with their investment objectives or risk tolerance
- Excessive trading activity or high turnover in their portfolio
- Lack of communication or evasive behavior from their financial advisor
If investors suspect that they have been victims of unauthorized trading or other forms of financial advisor misconduct, they should act promptly to protect their interests. One effective avenue for seeking recovery is through FINRA arbitration, a process designed to resolve disputes between investors and financial firms.
Haselkorn & Thibaut, with their extensive experience and a 98% success rate, has helped numerous investors recover losses through FINRA arbitration. The firm operates on a “No Recovery, No Fee” basis, ensuring that clients can pursue their claims without upfront costs.
Investors who believe they have suffered losses due to the alleged misconduct by Joseph Bowden or Merrill Lynch are encouraged to contact Haselkorn & Thibaut for a free consultation. With over 50 years of combined experience and a deep understanding of investment fraud cases, the firm is well-equipped to guide investors through the process of recovering their losses and holding wrongdoers accountable.
