← Broker database 2025-08-13
Brandon Jerome Larsen Suspended for Unauthorized Discretionary Trading
According to FINRA, Brandon Jerome Larsen was fined $5,000 and suspended for one month for exercising discretion in customer accounts without proper written authorization.
Larsen exercised discretion in 14 brokerage accounts, effecting 165 trades without the required written authority. While FINRA noted that the customers knowingly permitted Larsen to exercise discretion in their accounts, he did not have their written authorization or his member firm's acceptance of the accounts as discretionary.
The suspension was in effect from September 2, 2025, through October 1, 2025.
Discretionary authority allows a broker to make trading decisions on behalf of a customer without obtaining the customer's approval for each transaction. Because this authority can be subject to abuse, FINRA rules require written authorization from the customer and acceptance by the broker-dealer before discretionary trading can occur.
The requirement for written authorization exists to protect both customers and firms. It ensures there is a clear record of the customer's consent and establishes parameters for the discretionary authority. Without written authorization, disputes can arise about what trading authority the customer actually granted.
For investors, this case demonstrates the importance of formal documentation for discretionary accounts. If you want your broker to have discretionary authority, ensure proper paperwork is completed. If you have not signed a discretionary authorization but your broker is making trades without discussing them with you first, this may indicate unauthorized discretionary trading.
Review your account agreement and statements regularly to understand whether your account is discretionary and whether trading activity matches your expectations.