Kevin Rice, a broker and investment advisor at MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (CRD 7691), is facing a serious allegation of unauthorized trading in a customer’s account in August 2023. The settled customer dispute, which resulted in a payment of $5,624.86 to the client, raises concerns about the advisor’s conduct and its potential impact on investors.
According to the information provided in the FINRA BrokerCheck report, Kevin Rice has been employed by MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED since July 14, 1994. The report also reveals that the client’s allegations were denied by the registered representative, who claimed that the transactions were ratified by the client and that the firm credited the client’s account with interest as a goodwill gesture.
Despite the advisor’s denial, the seriousness of the allegation cannot be overlooked. Unauthorized trading is a violation of FINRA rules and a breach of the trust between a financial advisor and their client. Such misconduct can lead to significant financial losses for investors and undermine the integrity of the financial industry as a whole.
Understanding Unauthorized Trading and FINRA Rule 2010
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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 is strictly prohibited by FINRA Rule 2010, which requires brokers to observe high standards of commercial honor and just and equitable principles of trade.
In simple terms, a financial advisor must always obtain a client’s approval before making any transactions on their behalf. Failure to do so constitutes a violation of the advisor’s fiduciary duty and can result in disciplinary action by FINRA, as well as legal consequences.
The Importance of Unauthorized Trading for Investors
Unauthorized trading can have severe consequences for investors, as it exposes them to unwarranted risks and potential financial losses. When an advisor executes trades without a client’s consent, the client loses control over their investment decisions and may end up with a portfolio that does not align with their financial goals or risk tolerance.
Moreover, unauthorized trading can lead to excessive trading or churning, which generates higher commissions for the advisor at the expense of the client’s best interests. This practice erodes the client’s trust in their advisor and the financial industry as a whole, making it crucial for investors to remain vigilant and take action when they suspect misconduct.
Red Flags and Recovering Losses
Investors should be aware of the red flags that may indicate financial advisor malpractice, such as:
- Unexplained or excessive trading activity in their account
- Trades that do not align with their investment objectives or risk tolerance
- Lack of communication or documentation regarding trades
If an investor suspects that their financial advisor has engaged in unauthorized trading or other forms of misconduct, they should act promptly to protect their rights and recover any losses. One effective way to do so is by filing a FINRA arbitration claim.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Kevin Rice and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED. With over 50 years of combined experience and a 98% success rate, the firm has a proven track record of helping investors recover losses through FINRA arbitration.
Investors who have suffered losses due to unauthorized trading or other forms of financial advisor misconduct can contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-885-7162 . The firm operates on a “No Recovery, No Fee” basis, ensuring that clients can seek justice without upfront costs.
In conclusion, the allegation of unauthorized trading against Kevin Rice serves as a reminder of the importance of investor vigilance and the need for accountability in the financial industry. By working with experienced investment fraud attorneys like those at Haselkorn & Thibaut, investors can take steps to protect their rights and recover losses stemming from advisor misconduct.
