According to FINRA, Andrew Justin Grant was fined $5,000 and suspended from association with any FINRA member in all capacities for one month for exercising discretionary authority in customer accounts without obtaining prior written authorization from customers and without having the accounts accepted as discretionary accounts by his member firm.

Discretionary authority allows a representative to make investment decisions in a customer's account without obtaining the customer's prior approval for each transaction. This includes deciding which securities to buy or sell, the amount of securities, and whether to buy or sell. Because of the significant control this gives representatives over customer accounts, FINRA rules require written authorization from the customer and firm acceptance of the account as discretionary before a representative can exercise discretion.

Grant exercised discretionary authority in customer accounts without completing these required steps. By making investment decisions without proper authorization, Grant violated important safeguards designed to protect customers from unauthorized trading. Discretionary accounts require enhanced supervision by firms to ensure representatives do not abuse their authority or engage in excessive trading to generate commissions.

Investors should understand that they must provide written authorization before a representative can exercise discretion in their accounts, and the firm must formally accept the accounts as discretionary. If a representative is making investment decisions without asking for approval on each trade, and no discretionary authorization has been signed, this constitutes unauthorized trading. Customers should immediately contact their firm if they discover unauthorized discretionary trading in their accounts. This case demonstrates that exercising unauthorized discretion results in sanctions including suspension from the industry.