Waddell Reed Broker Admits To Unauthorized Trading
Donald Logan of Silverdale Washington a stockbroker formerly registered with Waddell Reed and Edward Jones has been fined $25,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Logan traded in customer’s investment accounts without authorization (2) Logan exercised discretion in customer’s investment accounts without generating written authorization from the firm and the customers and (3) Logan had customers provide him with signed but otherwise incomplete or blank documents. Letter of Acceptance Waiver and Consent No. 2015046378601 (Feb. 5, 2019).
According to the AWC, in March of 2015, during the time that Logan was associated with Edward Jones, discretion had been exercised by him in at least forty Edward Jones customer accounts. Apparently, a total of one hundred seventy-four transactions were placed by Logan in the customer’s accounts despite the firm never having authorized the customers’ accounts for discretionary trading. Apparently, Logan’s discretionary trading led Edward Jones to discharge him from the firm on July 1, 2015.
The AWC also revealed that on October 5, 2015, Logan became associated with Waddell Reed. There, Logan continued exercising discretion in the accounts of customers. Apparently, customers never provided Logan with written approval to effect transactions in their accounts on a discretionary basis. Moreover, Logan’s discretionary trading had apparently never been authorized by the firm.
The AWC stated that from October of 2015 to September of 2018, a total of one hundred ninety-one trades were placed by Logan using discretion in the customers’ accounts. Consequently, FINRA found that Logan’s conduct was violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
The AWC also detailed that Logan engaged in unauthorized trading of customer accounts while at Edward Jones. Particularly, from September of 2014 to June of 2015, eleven trades were placed by Logan in three customers’ accounts. Those customers apparently had no knowledge of Logan’s activities and they never consented to the transactions. FINRA found Logan’s conduct violative of FINRA Rule 2010.
Furthermore, from October of 2015 to September of 2018, during the time Logan was with Waddell Reed, he caused at least three of the firm’s customers to sign account documents that were blank or incomplete. Apparently, the forms Logan impermissibly had customers sign included rollover forms, account transfer forms, and investment switch firms. Logan reportedly intended to effect transactions in customer accounts using those forms. All the while, Logan reportedly knew that Waddell Reed forbade brokers from having customers sign incomplete or blank documents. FINRA found Logan’s actions in this regard to be violative of FINRA Rule 2010.
FINRA Public Disclosure reveals that Logan is the subject of a customer initiated investment related written complaint which was settled for $22,721.00 in damages on October 9, 2015 supported by accusations that while Logan was employed with Edward Jones, Logan misinformed the customer about the customer’s investment returns covering premiums for the customer’s AG Secure Survivor GUL II policy.
Logan was discharged from Waddell Reed on September 6, 2018 based upon allegations of Logan’s violations of the firm’s policy through his procurement of blank signed forms from customers and alterations of documents signed by the firm’s customers.