According to FINRA, William Joseph Conn of Piedmont, California was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for three months for exercising unauthorized discretion and making undisclosed gifts to a customer.

Conn exercised discretion in customer accounts without obtaining prior written authorization from the customers or prior permission from his member firm. While the customers knew Conn was placing trades in their accounts, the lack of formal discretionary authority violated securities regulations.

Discretionary authority allows a broker to make trading decisions without getting specific approval for each transaction. Because this grants significant control over customer assets, regulations require written customer consent and firm approval. The requirement protects customers by ensuring they have explicitly agreed to grant this level of control.

Additionally, Conn gifted one customer a total of $120,000 by making deposits into her checking account, circumventing firm policy. He failed to disclose these gifts to the firm. Each year, Conn falsely stated on his annual questionnaire that he had not gifted any customer more than $100.

Large gifts to customers raise significant concerns. They can create conflicts of interest, potentially influence the customer's decisions about their account, and may be used to compensate for undisclosed losses or misconduct. Firm policies limiting and requiring disclosure of gifts exist precisely to prevent these problematic situations.

The combination of unauthorized discretion, substantial undisclosed gifts, and false statements on compliance questionnaires reflects a pattern of operating outside firm oversight.

The suspension is in effect from April 7, 2025, through July 6, 2025.

Investors should be wary if a broker offers gifts of significant value, as this may indicate other undisclosed activities.