According to FINRA, Joseph Warner Rozof was assessed a deferred fine of $10,000 and suspended for 45 days for placing discretionary trades without written authorization and using unapproved communication channels.

Rozof placed over 250 discretionary trades in the brokerage accounts of two customers without written authorization. While Rozof discussed his trading strategy with the customers generally, he did not speak with them about specific trades on the dates of transactions. His firm did not accept the accounts as discretionary.

Additionally, Rozof used a personal cell phone to exchange business-related text messages with customers, including the two customers in whose accounts he placed discretionary trades. He did not provide these text messages to his firm for review or retention, causing the firm to maintain incomplete books and records.

The suspension was in effect from September 2, 2025, through October 16, 2025.

This case illustrates two related compliance failures. First, discretionary trading without proper authorization removes customer oversight of trading decisions. Second, using personal devices for business communications prevents firms from supervising communications and maintaining required records.

The combination is particularly concerning because the off-channel communications may have been used to discuss the discretionary trading that was occurring without proper authorization.

For investors, ensure you understand whether your account is discretionary and whether trades require your prior approval. If your broker uses personal devices or messaging apps to communicate with you about your investments, this may indicate communications are not being properly supervised or retained. Ask your broker to communicate through official firm channels.