According to FINRA, Richard Evans Leininger was fined $5,000 and suspended from association with any FINRA member in all capacities for two months for causing his member firm to make and preserve inaccurate books and records by mismarking order tickets as unsolicited when he had solicited the securities transactions.

The distinction between solicited and unsolicited orders is important for multiple reasons. Solicited orders are those where the broker recommends the transaction to the customer, triggering suitability obligations requiring the broker to have a reasonable basis to believe the recommendation is appropriate for the customer. Unsolicited orders are those initiated by the customer without a recommendation from the broker, and different suitability obligations apply. By mismarking solicited orders as unsolicited, Leininger created false records that could hide unsuitable recommendations from supervisory review.

Firms rely on accurate order markings to supervise their representatives' activities and ensure compliance with suitability rules. When orders are marked as unsolicited, supervisors may apply less scrutiny because the firm's suitability obligations are more limited. This creates opportunities for brokers to make inappropriate recommendations without triggering supervisory reviews. Additionally, if customer disputes arise about whether transactions were recommended, order tickets serve as important evidence. False markings can prejudice customers' ability to prove that recommendations were made.

The violation of causing the firm to maintain inaccurate books and records is serious because it undermines the integrity of the regulatory framework. Accurate records are essential for firms to supervise their representatives, for regulators to conduct examinations and investigations, and for resolving customer complaints. When representatives falsify records, it impairs all of these functions. For investors, this case highlights the importance of being clear with brokers about whether trades are being recommended or are investor-initiated. If a broker recommends a transaction, investors should expect that the broker has considered whether it is suitable and should feel free to ask about the basis for the recommendation. If disputes arise later about whether transactions were recommended, order tickets will be important evidence, though this case demonstrates that order tickets can be falsified. Investors should keep their own records of conversations with brokers, including notes about what was recommended and why. Confirmations and account statements should be reviewed carefully, and any transactions that were not authorized or that seem inconsistent with stated investment objectives should be questioned immediately.