Securities Arbitration Lawyer Blog
FINRA has suspended former RBC Capital Markets broker Scott Fergang from the securities industry for 15 business days for exercising discretion without written authorization in approximately four customer accounts. The suspension is scheduled to start on May 17, 2021, and end on June 7, 2021. Fergang was also fined $5,000.
If you have lost money with Scott Fergang, or RBC Capital Markets, contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
Iorio Altamirano LLP represents investors in disputes with their financial advisors or brokerage firms, such as RBC Capital Markets.
FINRA Letter of Acceptance, Waiver, and Consent (“AWC”)
Scott Fergang and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on April 23, 2021, over the following findings:
- From February 2015 through March 2019, while associated with RBC Capital Markets, Fergang effected 814 trades in four customer accounts using discretion without the customers’ prior written authorization and without the firm accepting these accounts as discretionary in writing. Based on the foregoing, Fergang violated NASD Rule 2510(b) and FINRA Rule 2010.
Discretionary Trading Without Prior Written Authorization
NASD Rule 2510(b) prohibits registered representatives from exercising any discretionary power in a customer’s account unless the customer has provided prior written authorization to the representative and the account has been accepted as a discretionary account by the representative’s firm in writing. A violation of NASD Rule 2510(b) is also a violation of FINRA Rule 2010.
FINRA Rule 2010 requires member firms and associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
According to the AWC, from February 2015 through March 2019, Fergang exercised discretionary trading authority to effect 814 transactions in four customers’ accounts. None of the four customers provided written authorization for Fergang to exercise discretion in their accounts, and RBC did not accept any of the four accounts as discretionary accounts.
A broker who engages in discretionary trading without proper authorization runs afoul of unauthorized trading rules.
RBC Capital Markets – A Duty to Supervise
Financial institutions like RBC Capital Markets must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity 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.
Scott Fergang (CRD#: 1758758)
Fergang entered the securities industry in 1987. He has 33 years of experience and was registered as a broker with RBC Capital Markets in Paramus, NJ, between March 2003 and July 2019.
Fergang has been registered with Stifel, Nicolaus & Company, Incorporated in Hackensack, NJ, since July 2019.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with Scott Fergang, or RBC Capital Markets, contact FINRA arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com 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.