← Broker database 2025-01-30
Frank J. Bodi Suspended for Unauthorized Discretionary Trading
According to FINRA, Frank J. Bodi has been fined $7,500 (deferred) and suspended from association with any FINRA member for one month for exercising discretion without prior written authorization in customer accounts.
While Bodi had previously discussed the trades with customers, he did not speak with them to obtain authorization on the specific days he executed the trades. None of the customers provided prior written authorization for Bodi to exercise discretion, and his firm did not accept the accounts as discretionary.
Discretionary trading authority allows representatives to make trading decisions without obtaining customer approval for each specific transaction. However, this authority requires explicit written consent from customers and firm acceptance because it gives significant control to the representative.
Even when customers generally approve of an investment strategy, representatives must either obtain approval for each trade or properly document discretionary authority. The fact that trades were previously discussed does not substitute for proper authorization.
Investors should clearly understand whether their accounts are discretionary or non-discretionary. In non-discretionary accounts, your representative should contact you before executing trades. If trades are being made without your specific approval, verify whether you have signed discretionary authorization documents.