The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker Jack David Stone. According to his publicly available FINRA BrokerCheck report, Jack David Stone has been the subject of multiple customer disputes and a FINRA sanction

Jack David Stone was an Illinois based securities broker. He worked in the securities industry for forty-one years. During his career, he was registered with nine different securities firms.

His Registrations

  • Pershing Securities Corporation (1971-1973)
  • Mesirow & Company (1974-1975)
  • Haas Securities Corporation (1978-1987)
  • Rodman & Renshaw Inc. (1988-1991)
  • Gruntal & Co. (1991-1997)
  • Schwab Capital Markets (1997-2000)
  • Direct Access Brokerage Services (2000)
  • Birkelbach Investment Securities (2003-2012)
  • Forest Securities (2012-2019)

The Allegations

  • In March 2011, a customer alleged that Jack David Stone recommended unsuitable investments, breached his fiduciary duty, churned their account, and breached contract. This case was settled for $100,000 in damages.
  • In August 2017, a customer alleged that Jack David Stone churned their account executed unauthorized trades, engaged in fraud, and breached his fiduciary duty. This case is currently pending.
  • Jack David Stone was officially sanctioned by FINRA in September 2019. The findings in this matter state that Jack David Stone refused to comply with an investigation into allegations that made material misrepresentations to customers and engaged in unauthorized discretionary trading. Due to this alleged failure to comply, Jack David Stone was barred by FINRA from acting as a securities broker in any fashion.

Discretion

Securities brokers are not allowed to execute trades on their customers behalf without obtaining their authorization to do so. Just because an investor hires a securities broker does not mean they have forfeited their right to decide what securities they want to be invested in. There is a trading practice known as discretion which allows brokers to make trades in a customer’s account without having to obtain the account holder’s authorization. However, before a broker can begin engaging in this practice, they must first receive express written authorization from the customer, and have their member firm deem the account in question as suitable for discretionary trading.

Discretion can be a very slippery slope as it gives securities brokers an excess of power. Securities brokers who exercise discretion can execute trades on their customers’ behalf that they are not financially suited for, or can trade their customers’ accounts excessively–both of which can cause serious financial harm to investors. This is the reason that brokers like Jack David Stone must receive written authorization from their customers before they begin discretionary trading. Even if an investor has provided implied or verbal authorization, there is a strong chance that they do not understand the trading practice and what exactly they are agreeing to.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Jack David Stone, please contact Oakes & Fosher for a free and private consultation.