← Broker database 2026-04-06
Louisiana Broker Paul Snow Suspended for Undisclosed Account Conversion and Unauthorized Discretion
According to FINRA, Paul Dudlo Snow IV was assessed a deferred fine of $20,000 and suspended from association with any FINRA member in all capacities for six months, effective April 20, 2026, through October 19, 2026, following an April 6, 2026 AWC.
When 11 of his customers asked to liquidate their fee-based advisory accounts, Snow incorrectly believed that firm policy prohibited him from executing unsolicited sales in those accounts. Rather than clarifying this misunderstanding with his firm, Snow converted the customers' advisory accounts into commission-based brokerage accounts—without disclosing the conversion to his customers or explaining the significant differences between the two account types.
The distinction between these account types is material. Fee-based advisory accounts charge ongoing management fees but do not generate per-transaction commissions. Brokerage accounts charge customers a commission every time a trade is executed. By converting accounts without disclosure, Snow caused his customers to pay $30,201.52 in commissions they would not have incurred had their positions been liquidated from their advisory accounts. The firm identified Snow's conduct, reversed the brokerage transactions, and refunded the commissions to customers—so the financial harm was ultimately remediated—but the violation remained.
Snow also exercised unauthorized discretion: he placed trades in the converted brokerage accounts without speaking with customers on the trade dates, despite lacking prior written authorization from customers to do so. The firm did not accept these accounts as discretionary accounts.
This case highlights the material financial consequences that can flow from an undisclosed account conversion. Investors have a right to understand their account structure and any changes to it. If a broker changes your account type without your knowledge and consent, that may violate FINRA rules and your firm's own policies. Always confirm in writing any changes to your account structure before they take effect.