← Broker database 2024-07-17
Laura Casey Suspended for Regulation Best Interest Violations and Discretionary Trading
According to FINRA, Laura Casey was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in all capacities for seven months on July 17, 2024, for willfully violating the Care Obligation of Regulation Best Interest and engaging in unauthorized discretionary trading.
Casey bought and sold products that included sales charges in the brokerage accounts of customers who also held advisory accounts at her member firm, without considering the comparative costs of the transactions. Casey purchased products, including exchange-traded funds, which required the customers to pay upfront sales charges that the customers would not have had to pay had the products been purchased in their advisory accounts. Casey then sold the securities within days of purchase, resulting in additional sales charges. In certain instances, Casey used the proceeds to make additional purchases, which resulted in additional sales charges.
Casey did not have a reasonable basis to believe that placing these trades in the customers' brokerage accounts was in the customers' best interests in light of their intended short holding periods and the associated costs. Collectively, Casey's trades subjected the customers to $37,757.54 in unnecessary sales charges. However, Casey's firm identified her misconduct and reversed the transactions, so customers did not pay any unnecessary sales charges and Casey did not earn any commissions.
Additionally, Casey engaged in discretionary trading in customers' brokerage accounts without her firm accepting any of the accounts as discretionary and without first speaking to the customers on the date of the transactions or obtaining their prior written authorization to effect the transactions.
The seven-month suspension, in effect from August 5, 2024, through March 4, 2025, reflects the seriousness of these violations. This case illustrates the importance of considering costs and acting in customers' best interests when making recommendations, as well as obtaining proper authorization for discretionary trading.