According to FINRA, Glenn Allen Donnell (CRD #2239397), a registered representative based in Crystal River, Florida, was assessed a deferred fine of $12,500 and suspended from association with any FINRA member in all capacities for four months. Donnell was found in violation of FINRA rules for exercising discretion in customer accounts without proper written authorization and for causing member firms to maintain inaccurate books and records by mismarking solicited trades as unsolicited.
Discretionary trading authority allows a broker to make trades in a customer's account without obtaining the customer's prior approval for each individual transaction. While customers may verbally give a broker authority to trade at the broker's discretion, FINRA rules require that this authorization be documented in writing. This written authorization requirement protects customers by creating a clear record of the scope of authority granted and allows the firm to apply appropriate supervisory oversight to discretionary accounts.
FINRA's findings established that Donnell executed transactions in customer accounts using discretion, even though the customers had not provided the required written authorization. While some customers had given Donnell express or implied oral authority, none had completed the required written documentation. All of the trades in question involved marijuana securities, a sector that often involves heightened risk and regulatory scrutiny.
Beyond the unauthorized discretion, Donnell caused two member firms to maintain inaccurate books and records by mismarking solicited trades as unsolicited. A solicited trade is one where the broker recommends the transaction, while an unsolicited trade is initiated by the customer. The distinction is important for regulatory and supervisory purposes because solicited trades carry different compliance obligations. At one firm, Donnell untruthfully answered the firm's direct inquiries about the nature of the trades. At another firm, he deliberately marked the trades as unsolicited to circumvent the firm's trading system block on solicited over-the-counter trades, effectively bypassing a compliance control designed to protect investors.
Without admitting or denying the findings, Donnell consented to the sanctions through an AWC agreement issued on August 15, 2024. The four-month suspension was in effect from August 19, 2024, through December 18, 2024. This matter is documented under FINRA Case #2021072340501.
Investors should understand that written authorization for discretionary trading is a protection designed for their benefit. If a broker is making trades without your explicit prior approval for each transaction, you should ensure that proper written authorization is in place. Investors should also review their trade confirmations to verify that the solicitation codes accurately reflect whether they or their broker initiated each trade.
