According to FINRA, Matthew T. Mierzycki was fined $10,000 and suspended from association with any FINRA member in all capacities for four months for exercising discretionary trading authority without prior written authorization from customers or firm approval. Mierzycki executed trades in numerous customer accounts without speaking to or communicating with the customers on the days of the trades.

Discretionary authority allows a representative to make trading decisions without consulting the customer for each transaction. However, this authority requires written authorization from the customer and firm approval because of the significant control it grants. Trading without these authorizations exposes customers to unauthorized transactions and potential abuse.

Additionally, Mierzycki failed to timely disclose three compromises with creditors on his Form U4 despite his knowledge of them. He had entered into agreements with two banks to settle debts for thousands of dollars less than the full amounts owing. These compromises are material information that must be disclosed as they may indicate financial distress that could create incentives for misconduct.

Financial disclosure failures are taken seriously because representatives in financial distress may be tempted to engage in misconduct to resolve their problems. The four-month suspension and $10,000 fine reflect both the discretionary trading violations and the disclosure failures. Investors should always review their trade confirmations to ensure they authorized all transactions and should check BrokerCheck for any financial disclosure issues that might indicate a representative is under financial pressure.