Former New Jersey Broker Consented to FINRA Sanctions for Effecting $1.7 Million in Trades without Customer AuthorizationWednesday, August 19, 2020
Former general securities representative Sylvester Knox recently consented to a suspension from associating with member firms of the Financial Industry Regulatory Authority (FINRA) to resolve allegations of effecting unauthorized transactions in customer accounts.
Knox has been associated with FINRA member firms since July 1989 and was recently associated with FSC Securities Corporation from January 2017 to August 2018 and Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) from August 2000 to February 2017. Both brokerage firms are located in Short Hills, New Jersey. Although Knox is not currently associated with a member firm, his FINRA BrokerCheck report reveals that he voluntarily resigned from Merrill Lynch when allegations arose that he “engag[ed] in unauthorized transactions in certain client accounts, making misrepresentations to certain clients and conduct inconsistent with Firm policies related to client complaints and outside speaking engagements.” Shortly thereafter, FINRA began investigating these allegations.
In May 2018, Knox entered into a Consent Order with the State of Michigan Department of Licensing and Regulatory Affairs, Corporations, Securities & Commercial Licensing Bureau to withdraw his securities registration and pay $1,500 for filing false or misleading information. He also entered into a Stipulation and Consent Agreement with the State of Florida, Office of Financial Regulation for making a material omission by failing to disclose a criminal indictment on his Form U4 in December 2018.
FINRA Department of Enforcement alleges in a Letter of Acceptance, Waiver and Consent (AWC) approved on August 6, 2020, that Knox effected 36 transactions between June 2015 and October 2016, in three customer accounts totaling $1.7 million without the customers’ authorization or consent for the trades. Knox also allegedly exercised discretionary trading authority by effecting transactions totaling over $2 million in four customers’ accounts without obtaining written authorization from the customers and prior approval from Merrill Lynch.
Finally, FINRA alleges in the AWC that Knox failed to timely disclose a felony indictment he received in March 2015 on a filing of an amended Form U4.
By signing the AWC, Knox consented, without admitting or denying the allegations made against him, to a nine-month suspension in all capacities and a $10,000 fine.
According to his FINRA BrokerCheck report, Knox has had almost two dozen customer disputes that have settled for amounts between $5,000 and $1.5 million. The customer disputes alleged unauthorized account activity and misrepresentation, among other things.
If you invested and lost money due to your broker’s misconduct, call us today at 1-877-410-8172 for a free consultation. We may be able to help you recover your losses.