Former Sigma Financial Corporation Representative Agrees to FINRA Sanctions to Resolve Allegations of Discretionary Trading without Written Customer Authorization and Prior Approval from FirmTuesday, January 15, 2019
On January 9, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Gregory Rusnak, a former registered representative associated with Sigma Financial Corporation (Sigma) in St. Charles, Illinois.
According to his FINRA BrokerCheck report, Rusnak was associated with Sigma from January 2011 to December 2017 until he was discharged after an internal investigation revealed that he violated company policy by exercising discretion in customer accounts without prior approval. Shortly after Sigma reported the nature of his departure to FINRA, the Department of Enforcement began investigating the allegations.
FINRA alleges in the AWC that between March 2014 and May 2017, Rusnak exercised discretion in two customer accounts by executing 140 trades without discussing it with the customers on the day of each transaction. Rusnak also allegedly did not seek Sigma’s written approval to exercise discretion for these trades. According to the AWC, Sigma’s written supervisory procedures prohibited representatives from exercising discretion in clients’ accounts, with two exceptions that did not apply to Rusnak’s discretionary trading.
FINRA alleges in the AWC that Rusnak also falsely attested on Sigma’s annual compliance questionnaires from 2014 to 2016 that he did not have accounts in which clients had authorized him to exercise discretion.
Based on the foregoing, Gregory Rusnak violated NASD Conduct Rule 2510(b) and FINRA Rule 2010. Without admitting or denying the allegations made against him by FINRA, Rusnak consented to a suspension from associating with any FINRA member firm in any capacity for fifteen business days and a $5,000 fine.
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