← Broker database 2025-11-19
Mark Allen Carter Suspended 9 Months for Excessive Options Trading Violating Reg BI
According to FINRA, Mark Allen Carter was fined $20,000, suspended from association with any FINRA member in all capacities for nine months, and ordered to pay disgorgement of $6,773 in commissions plus interest for willfully violating Regulation Best Interest by recommending excessive options trading to retail customers and exercising unauthorized discretion in their accounts.
The findings revealed devastating options trading that destroyed the customers' accounts. Carter recommended options trading to two retail customers, a married couple, whose investment objectives were capital appreciation with a long investment time horizon. However, Carter's options trading in their accounts resulted in annualized cost-to-equity ratios averaging 42 percent—meaning the customers stood little chance of making money or even breaking even due to the excessive costs generated by Carter's trading.
The results were catastrophic. Carter's trading resulted in losses of over $600,000, representing over 99 percent of the value of the customers' accounts. Meanwhile, Carter received $6,773 in commissions from the trades that destroyed the customers' wealth. This cost-to-equity ratio and the resulting losses demonstrate that the trading was not in the customers' best interests and was instead designed to generate commissions for Carter.
Carter violated Regulation Best Interest by failing to have a reasonable basis to conclude that the options transactions would be in the customers' best interest or suitable for them based on their investment profile and the potential risks of the transactions. The excessive trading and resulting losses speak for themselves in demonstrating the violation.
To Carter's credit, he self-disclosed his misconduct to his member firm. The firm subsequently reimbursed the customers for their losses after they complained. However, this restitution came only after the customers had suffered the distress of watching their accounts devastated by Carter's unsuitable recommendations.
Carter's misconduct extended beyond unsuitable recommendations. He exercised discretion in the customers' accounts without prior written authorization. Although the customers orally authorized Carter to use discretion for "low risk" trading, his firm prohibited discretion in any customer account without written authorization. Carter placed trades without speaking to customers about them, exercising unauthorized discretion. He also mismarked solicited trades as unsolicited, further concealing the nature of his trading from firm supervision.
The nine-month suspension, in effect from December 1, 2025, through August 31, 2026, along with the $20,000 fine and disgorgement order, reflects the severity of excessive trading that destroyed customers' accounts through unsuitable options recommendations.
Investors should be extremely cautious about options trading, which can be highly risky and costly, and should immediately question any trading that generates costs approaching or exceeding account value.