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Joseph Yanofsky Fined $10k for Unauthorized Use of Discretion, Directing Unlicensed Subordinate to Enter Trades

FINRA suspended and fined former Merrill Lynch and current First Financial Equity Corporation (both of Greenwood Village, Colorado) broker Joseph "Joe" Ira Yanofsky for exercising discretion without authorization, and for causing the firm to maintain inaccurate books and records by directing an unlicensed subordinate to use another registered representative's login credentials and computer to enter trades. Yanofsky had been working in Colorado at "Yanofsky Group."

AWC #2015045664601

The improper discretion charge refers to certain Merrill Lynch syndicate equity offerings and alleges that Yanofsky (CRD #870054) purchased shares for nine customers without receiving specific authorization to participate in the offerings.

Investigators found that in many cases, Yanofsky purchased the shares in non-discretionary accounts without even having obtained verbal authorization, much less prior written authorization, "at any point" following the offerings launch.

FINRA also alleged that "on many occasions beginning in June 2014," Yanofsky directed an unlicensed subordinate employee to enter syndicate offering orders using another registered representative's login credentials and computers to enter these trades. Because the Securities Exchange Act requires firms to keep track of the identity of any person who enters an order on behalf of a customer, Yanofsky's direction caused the firm to maintain inaccurate records by falsely reflecting the identity of the person who had entered the orders.

Yanofsky's BrokerCheck report indicates several settled customer disputes from 2015 alleging unsuitable recommendations, misrepresentation, failure to follow instructions, and unauthorized trading.

Merrill Lynch discharged Yanofsky in 2015 as well for allegations related to exercising discretion in non-discretionary accounts, providing inaccurate responses on internal compliance questionnaires, and failing to report a customer complaint on a timely basis.

Oddly enough, Yanofsky's 1990-2015 employment at Merrill Lynch in Colorado was actually his second stint with the firm. Yanofsky was previously associated with Merrill Lynch from 1979-1982 until a 1983 customer dispute alleging misrepresentation, churning, discretion, and unsuitability led to a settlement effected for, according to Yanofsky's statement, "peace of mind."

If you have invested with former Merrill Lynch and current First Financial Equity broker Joseph Ira Yanofsky of Greenwood Village, Colorado, or with any representative or financial adviser whose unauthorized use of discretion in your account to effect improper or excessive trades has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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