May 6, 2022 — Maurice Wutscher attorney Brady Hermann spoke to AdvisorHub recently about the termination of a broker for excessive trading in his personal account and why brokers who trade frequently in their own accounts should tread carefully.
The Financial Industry Regulatory Authority requires firms to keep track of brokers’ trading as a way of protecting clients’ interests.
Mr. Hermann said compliance departments are paying attention to what financial advisors do in their personal accounts, looking for potential red flags that could lead to harmful conduct in client accounts. This is especially true if a broker is on heightened supervision.
“When brokers are on this heightened supervision, they have, obviously, a set of rules that they have to follow, and then if they break it, they typically get fired,” Mr. Hermann told AdvisorHub.
Brady Hermann is senior counsel in the Boston and New York offices of Maurice Wutscher LLP. He regularly represents financial services companies including banks, broker-dealers, financial advisors, financial asset buyers and third party debt collectors in individual, class action and regulatory matters. He has successfully represented clients throughout the country against claims for violations of securities laws, the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act, and various state consumer protection statutes.