Securities Arbitration Lawyer Blog
FINRA has suspended former LPL Financial LLC broker Michael Miles Hartlett from the securities industry for ten business days. Hartlett consented to the sanctions and to the entry of findings that he exercised discretionary trading authority in a customer’s accounts without having obtained prior written authorization of the customer.
Hartlett’s suspension is scheduled to begin on November 15, 2021, and end on November 29, 2021. He was also fined $5,000.
If you have lost money with Michael Miles Hartlett, or LPL Financial LLC, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms.
FINRA Letter of Acceptance, Waiver, and Consent No. 2020066023101
Michael Miles Hartlett and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on October 22, 2021, after FINRA alleged that from May 2018 through February 2020, while associated with LPL Financial LLC (“LPL”), Hartlett violated NASD Rule 2510(b) and FINRA Rules 3260(b) and 2010 by exercising discretionary trading authority without having obtained prior written authorization of the customer in a total of 22 trades in three accounts held by the customer at LPL.
FINRA indicated that it initiated the matter based on a tip to FINRA’s Office of the Whistleblower.
NASD Rule 2510(b) and FINRA Rule 3260(b) provide that no “registered representative shall exercise any discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member, as evidenced in writing by the member.”
Violations of NASD Rule 2510(b) and FINRA Rule 3260(b) also violate FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade. During the relevant period outlined in the AWC, LPL prohibited its registered representatives from exercising discretion in customers’ brokerage accounts.
In May 2018, a customer opened three brokerage accounts at the firm with Hartlett as the assigned representative. The customer did not execute any documentation granting Hartlett discretionary trading authority in the three accounts. However, the customer orally granted Hartlett discretionary trading authority; Hartlett did not disclose this grant of authority to LPL. From May 2018 through February 2020, Hartlett exercised discretionary trading authority without obtaining prior written authorization from the customer in a total of 22 trades in the three accounts held by the customer. Between 2018 and 2020, Hartlett also falsely stated in three annual compliance questionnaires that he had not exercised discretionary trading authority in any customers’ brokerage accounts.
Therefore, Hartlett violated NASD Rule 2510(b) and FINRA Rules 3260(b) and 2010.
A broker who engages in discretionary trading without proper authorization runs afoul of unauthorized trading rules.
LPL Financial LLC – A Duty to Supervise
Financial institutions like LPL Financial LLC 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.
Michael Miles Hartlett (CRD#: 1022139)
Hartlett entered the securities industry in 1982 and has 39 years of experience.
According to Hartlett’s public FINRA CRD, he is currently associated with International Assets Advisory, LLC. From February 2018 to October 2021, Hartlett was registered with LPL Financial LLC, and from September 2007 to February 2018, he was registered with Invest Financial Corporation.
Hartlett’s CRD shows a total of four customer complaints; three of the complaints were settled, and one was denied. The claims generally alleged that Hartlett recommended unsuitable investments.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with Michael Miles Hartlett, or LPL Financial LLC, 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.