← Broker database 2024-07-22
Scott Eugene Buck Suspended for Unauthorized Trading and Unapproved Communications
According to FINRA, Scott Eugene Buck was fined $7,500 and suspended from association with any FINRA member in all capacities for two months on July 22, 2024, for effecting three unauthorized transactions in a customer's account, using unapproved communication methods, and making false statements to his firm.
Buck effected three unauthorized transactions in a customer's account to fund the customer's required minimum distributions, including one transaction after the customer died. The trades included sales of mutual fund positions totaling approximately $44,000. Buck did not earn any commissions on the trades. Buck learned of the customer's death after placing the third trade but subsequently falsely indicated to his member firm that he had attempted to reach the customer on the day of that trade.
Additionally, Buck used an unapproved communication method, his personal cell phone, to communicate via text message with firm customers regarding firm-related business, including securities recommendations and orders. This caused his firm to not preserve those communications as required by regulatory record-keeping requirements. In addition, Buck falsely answered a question on his firm's annual compliance questionnaire that asked whether all of his investment, financial or insurance related electronic communications were exchanged using his firm-approved email.
Unauthorized trading violates the fundamental principle that customers must authorize transactions in their accounts. Making trades without customer authorization, especially after a customer has died, demonstrates a serious lack of respect for customer rights and proper procedures. Using unapproved communication methods prevents firms from supervising representatives' communications with customers and fails to preserve required records.
The two-month suspension, in effect from August 19, 2024, through October 18, 2024, reflects the seriousness of these violations. Ultimately, without being asked to do so, Buck provided all of his text messages with customers to his firm, which was considered in determining the sanctions.