Ex-Securities America broker suspended for hidden options trades that hurt client

A Securities America broker who was fired has been suspended from the industry for six months in the wake of allegations that he traded options in a client’s account without notifying his firm.

The broker, Michael D. Jackson, recommended that a customer open an account in 2016 in a firm other than Securities America for the purpose of trading options, according to the Financial Industry Regulatory Authority Inc. It is against brokerage industry rules for a broker to place trades in such outside accounts.

The customer agreed, and over the course of seven months, Mr. Jackson placed orders for 42 sets of options transactions in the customer’s new account, according to the Finra order, which was released on Monday.

Mr. Jackson did not contact the customer before placing any of those orders, nor did he provide requisite notice to either firm about his participation in those transactions, according to Finra. The client lost all of the $10,000 that was in the account.

Mr. Jackson could not be reached on Tuesday to comment. He accepted the Finra settlement without admitting or denying its findings.

In May 2017, the client complained to Securities America about Mr. Jackson’s trading, and that complaint precipitated the Finra investigation. Securities America reimbursed the client and fired Mr. Jackson in October 2017, according to his BrokerCheck report.

Related Topics: Financial Industry Regulatory Authority