According to FINRA, Jeremy Jefferson Jacobson was assessed a deferred fine of $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay deferred disgorgement of $7,887 in commissions, plus interest.

Jacobson executed trades with a total principal value of approximately $1.1 million in his customers' non-discretionary brokerage accounts without the customers' authorization or consent for the trades. In non-discretionary accounts, representatives must obtain customer authorization before executing each trade. By trading without authorization, Jacobson violated customers' control over their own investments and exposed them to market risk without their knowledge or approval.

Jacobson received $7,887 in total commissions from these unauthorized trades, which he is now required to disgorge. Disgorgement requires the return of ill-gotten gains and is designed to ensure that violators do not profit from their misconduct. In this case, the commission disgorgement acknowledges that Jacobson should not benefit financially from transactions that customers did not authorize.

Unauthorized trading is a serious violation because it fundamentally breaches the trust relationship between representatives and customers. Customers have the right to make their own investment decisions in non-discretionary accounts, and representatives who trade without authorization usurp this right and potentially expose customers to losses or tax consequences they did not approve.

The three-month suspension and commission disgorgement reflect the seriousness of unauthorized trading. While the settlement does not indicate whether customers suffered losses from the unauthorized trades, the violation itself is serious regardless of outcome because it deprives customers of control over their own accounts.

For investors, this case highlights the importance of carefully reviewing account statements and confirmations to identify any unauthorized transactions. Investors should immediately report unauthorized activity to their firm and to FINRA. Account agreements and new account documents specify whether an account is discretionary or non-discretionary, and investors should understand the difference. The suspension was in effect from June 20, 2023, through September 19, 2023.