On February 24, 2024, Petros Family Wealth terminated Erik Hasselquist following allegations that he engaged in unauthorized trading in client accounts. This is an extremely serious allegation, as unauthorized trading violates file a FINRA complaint rules and can result in significant losses for investors. It’s crucial for investors to stay informed about their financial advisor’s background and any potential red flags.
According to Hasselquist’s BrokerCheck record, he has been in the securities industry for 6 years and previously worked for Morgan Stanley. This recent termination marks the first disclosure on his record. However, it’s important to note that even advisors with clean backgrounds can engage in misconduct.
Understanding Unauthorized Trading
Unauthorized trading occurs when a financial advisor makes trades in a client’s account without obtaining prior permission. This violates FINRA Rule 2010, which requires advisors to observe high standards of commercial honor and just and equitable principles of trade. Unauthorized trading can be particularly harmful because:
- Clients lose control over their investment decisions
- Advisors may take on excessive risk to generate higher commissions
- Clients can suffer substantial financial losses
As Warren Buffett once said, “Risk comes from not knowing what you’re doing.” When an advisor engages in unauthorized trading, clients are exposed to risks they may not fully understand or be prepared for.
Consequences and Lessons Learned
For advisors who engage in unauthorized trading, consequences can include termination by their employer, fines, suspensions, or even permanent bans from the securities industry. Investors who suffer losses due to unauthorized trading may be able to recover damages through FINRA arbitration.
This case serves as a reminder of the importance of monitoring your investments and staying vigilant for any red flags your advisor may be mismanaging your money activity. According to a study by the University of Chicago, approximately 7% of financial advisors have misconduct records. While this may seem like a small percentage, it translates to over 100,000 advisors nationwide.
If you suspect that your advisor has engaged in unauthorized trading or other misconduct, don’t hesitate to reach out to an experienced securities attorney. They can help you understand your rights and options for recovery.
For more information on Erik Hasselquist’s disclosure history, you can view his full BrokerCheck record here.
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