According to FINRA, William Worthen King has been assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 30 days for exercising discretion in customer accounts without proper authorization.

King placed trades in six brokerage accounts held by four firm customers, three of whom were seniors, without prior written authorization from the customers and without his member firm having accepted the accounts as discretionary.

While King discussed investment strategy with the customers, he had not received authorization to exercise discretion. Discretionary trading authority requires explicit written authorization from the customer and acceptance by the firm before a representative can make trading decisions without obtaining approval for each transaction.

King also inaccurately attested in compliance questionnaires that he had not exercised discretionary trading authority in customer accounts.

This case highlights important protections for investors, particularly seniors. Without written discretionary authority, customers retain control over every transaction in their account. When representatives trade without this authorization, they bypass an important safeguard that ensures customers approve each investment decision.

The fact that three of the four affected customers were seniors is significant. Seniors are considered vulnerable investors who may be more susceptible to unauthorized trading practices.

Investors should understand that their representative generally needs their permission for each trade unless they have signed a discretionary trading agreement. If you notice trades in your account that you did not authorize, contact your firm immediately and consider filing a complaint with FINRA.