As a financial analyst and legal expert with over a decade of experience, I understand the gravity of allegations made against financial advisors and the potential impact on investors. In the case of Paul Furlong (CRD #: 2177795), a broker registered with Janney Montgomery Scott, an investor dispute has come to light, as disclosed on his BrokerCheck record accessed on August 9, 2024.
According to the disclosure, on July 18, 2024, an investor alleged that Furlong executed unauthorized trades in their account. Unauthorized trading is a serious violation of FINRA rules and can lead to significant losses for investors. It occurs when a broker makes trades in a client’s account without obtaining prior consent or authorization. Unauthorized trading is a common form of investment fraud that can have devastating consequences for investors.
For investors, allegations of unauthorized trading raise concerns about the trustworthiness and integrity of their financial advisor. It is crucial for investors to regularly review their account statements and question any unfamiliar or unauthorized transactions. If you suspect your financial advisor has engaged in unauthorized trading, it is essential to take prompt action to protect your investments and legal rights.
Background and broker dealer
Paul Furlong has been registered with Janney Montgomery Scott since 2019. Prior to joining this firm, he was registered with Wells Fargo Clearing Services, LLC from 2012 to 2019 and Morgan Stanley from 2009 to 2012. Furlong’s BrokerCheck record also reveals one previous disclosure, a customer dispute from 2018 that was denied.
Understanding FINRA rules
FINRA Rule 2010 requires brokers to observe high standards of commercial honor and just and equitable principles of trade. Engaging in unauthorized trading violates this rule and may also breach other FINRA rules, such as Rule 3260, which prohibits discretionary trading without prior written authorization from the client.
In simpler terms, brokers must always obtain consent from their clients before executing any trades on their behalf. Failing to do so is a serious breach of trust and can result in disciplinary action against the broker. According to Investopedia, unauthorized trading is a violation of the fiduciary duty that financial advisors owe to their clients.
Consequences and lessons learned
Brokers who engage in unauthorized trading may face consequences such as fines, suspensions, or even permanent barring from the securities industry. For investors, the lesson learned is the importance of closely monitoring your investments and maintaining open communication with your financial advisor.
As the famous investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” Investors should educate themselves on their investments and the rules governing their financial advisors to minimize the risk of falling victim to unauthorized trading or other forms of misconduct.
It is worth noting that, according to a study by the University of Chicago, approximately 7% of financial advisors have a history of misconduct, highlighting the need for investors to remain vigilant and thoroughly vet their chosen professionals.
If you believe you have been the victim of unauthorized trading or other forms of investment fraud, it is crucial to consult with an experienced securities attorney to discuss your legal options and potential recovery of losses.
