FINRA has suspended financial advisor Drew R. Mantel from the securities industry for three months and fined him $5,000. Drew Mantel was registered with Ameriprise Financial Services, LLC in Miamisburg, Ohio, from March 2018 until November 2018. At that time, Ameriprise terminated his employment. Previously, he was registered with Edward Jones in Franklin, Ohio, from August 2003 until April 2018.
Drew R. Mantel and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on December 15, 2020, over allegations related to Mr. Mantel’s conduct between June 2017 to September 2019, specifically that he:
- From June 2017 through January 2018, while employed by Edward Jones, Mr. Mantel exercised discretion without written authorization when executing approximately 110 transactions involving seven customers, including four senior investors.
- From June 2018 through September 2019, while employed by Ameriprise Financial Services, LLC, Mr. Mantel exercised discretion without written authorization when executing approximately 30 transactions in seven customers’ accounts, including two accounts that belonged to senior investors.
- Mantel did not have his firms’ approval to exercise discretion in these accounts.
- Manel exercised discretion without written authorization despite informal discipline from Edward Jones in July 2015 and July 2015, and from Ameriprise in July 2019, for the improper use of discretion.
- At both firms, the informal discipline consisted of written warnings and oral discussions about the firms’ policies regarding the use of discretion.
Under FINRA rules, to exercise discretionary power, a broker must have prior written authorization from a customer before executing a trade. FINRA rules require that a customer sign a discretionary disclosure, which allows the customer to place limits on the discretion being granted to the broker. Additionally, the firm must approve the account to be discretionary. A broker can then use his discretion and place trades without obtaining the customer’s authorization first. However, without such written authorization by the customer and firm approval, a broker who receives verbal authorization from a client to execute a trade and makes the transaction violates FINRA rules. Oral permission to execute a trade is not sufficient.
In non-discretionary accounts, customers retain discretion, and brokers must always obtain their customer’s permission before placing a trade. You can read more about unauthorized trading in the context of both discretionary and non-discretionary accounts here: Unauthorized Trading.
Financial institutions, like Ameriprise and Edward Jones, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as the improper use of discretion, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
If you have lost money with Drew R. Mantel, Ameriprise, or Edward Jones, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP at firstname.lastname@example.org or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.