Sigma Financial Broker Fined For Unauthorized Trading
Gregory Joseph Rusnak of St. Charles Illinois a stockbroker formerly registered with Sigma Financial Corporation has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Rusnak executed unauthorized trades in the accounts of Sigma Financial Corporation customers. Letter of Acceptance Waiver and Consent No. 2017055797701 (Jan. 9, 2019).
According to the AWC, between March of 2014 and May of 2017, discretion had been exercised by Rusnak in the accounts of two Morgan Stanley customers’ accounts. Particularly, Rusnak reportedly effected one hundred forty trades in the customers’ accounts despite never having spoken to customers on the days the transactions were effected.
The AWC stated that Rusnak failed to procure customers’ written authorization prior to exercising discretionary power in their accounts. Moreover, the investment accounts were not approved by Sigma Financial Corporation for discretionary trading. Indeed, trading on a discretionary accounts had been prohibited by the firm during the time that Rusnak placed those trades; the only exceptions to its policy did not apply to Rusnak.
The AWC further stated that Rusnak had been administered the firm’s compliance questionnaires for 2014 through 2016. Rusnak reportedly claimed in those questionnaires that he did not have accounts in which discretionary trading authorization was granted to him by customers. Apparently, the firm came to know about Rusnak’s unauthorized trading when complaints were received by the firm from customers regarding transactions executed in their accounts. FINRA found that Rusnak’s conduct was violative of National Association of Securities Dealers (NASD) Conduct Rule 2510(b) and FINRA Rule 2010.
FINRA Public Disclosure reveals that Rusnak has been identified in two customer initiated investment related disputes containing accusations of his misconduct while employed with Sigma Financial Corporation and Robert W. Baird Co. Inc. Specifically, on March 28, 2008, a customer initiated investment related complaint concerning Rusnak’s activities was settled for $50,000.00 in damages supported by allegations that the customer was charged excessive commissions and placed in over-the-counter equities investments that were not suitable for the customer.
Thereafter, a customer initiated investment related arbitration claim regarding Rusnak’s conduct was resolved for $155,000.00 in damages founded on accusations that between 2014 and 2016, inappropriate equity trades were placed in the customer’s account given the customer’s objectives for investing. FINRA Arbitration No. 17-02220 (Dec. 11, 2018).
Sigma discharged Rusnak on December 13, 2017 based upon allegations that Rusnak effected discretionary trades in customer accounts; conduct violative of Sigma Financial Corporation’s trading policy.