Securities Lawyers Blog
According to BrokerCheck records financial advisor Herbert Voss (Voss), formerly associated with Stockcross Financial Services, Inc. (Stockcross Financial), has been subject to eight customer complaints, one FINRA action, and one employment termination. According to records kept by The Financial Industry Regulatory Authority (FINRA) Voss was barred from the financial industry in May 2018 when Voss consented to the sanction and to the entry of findings that he refused to appear for FINRA testimony concerning a customer complaint alleging that Voss had engaged in unauthorized trading in the customer’s account. The refusal to cooperate draws an automatic bar from the industry.
In December 2017, a customer filed a complaint alleging that Voss’ investments caused poor performance and $550,000 in damages. The claim is currently pending. Prior to that, in February 2017 a client accused Voss of causing $900,000 in damages due to unsuitable investments.
Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place. Often times, brokers engage in unauthorized trading as part of an attempt to churn or excessively trade a client’s account.