James Parrelly Suspended By FINRA For Allegedly Engaging In Unauthorized Discretionary Trading

The law firm of Oakes & Fosher is currently investigating the alleged misconduct of securities broker James Parrelly. According to his publicly available FINRA BrokerCheck report, James Parrelly has been the subject of multiple customer disputes over the course of his career.

James Parrelly is a Michigan-based securities broker who has worked in the securities industry for thirty-eight years. During his career, he has been registered with nine different securities firms.

His Registrations 

• Kidder, Peabody & Co. (1981-1987)


• Painewebber Incorporated (1987-1990)


• Hamilton Investments (1990-1994)


• North American Financial Group (1994-1996)


• American Investment Services (1996-2001)


• Spelman & Co. (2001-2002)


• Girard Securities (2002-2004)


• First Midwest Securities (2004-2015)


• Investment Planners (2015-Present)

The Allegations 

• In June 1993, a customer alleged that James Parrelly had made material misrepresentations about an investment. This case was settled for $290,000 in damages.


• In April 1995, a customer alleged that Parrelly had made unsuitable investment recommendations, made material misrepresentations, made unauthorized transactions, and engaged in churning. This case was settled for $27,000 in damages.


• In June 1995, a customer alleged that Parrelly had breached his fiduciary duty and misrepresented investments. This case was settled for $110,000 in damages.


• In April 2003, a customer alleged that Parrelly had made unsuitable and high-risk investment recommendations, engaged in fraud, breached his fiduciary duty, and managed their account negligently. This case was settled for $150,000 in damages.


• In September 2010, a customer alleged that Parrelly had engaged in unauthorized, excessive, and unsuitable discretionary trading. This case was settled for $90,000 in damages.


• In April 2019, a customer alleged that Parrelly had recommended unsuitable investments and excessively traded their account. This case is currently pending, and the customer is seeking $500,000 in damages.


• In May 2020, Parrelly was officially sanctioned by FINRA for executing discretionary transactions in a customer’s account without receiving written authorization prior to doing so. As a result of these findings Parrelly was suspended from acting as a securities broker in all capacities for a period of fifteen business days and fined $5,000.

What Does This Mean?

Securities brokers are prohibited from executing trades on behalf of investors without first obtaining the investor’s authorization.  There is however a practice known as discretionary trading that allows a securities broker to execute trades in a client’s account without obtaining authorization for each one, but the broker must first obtain written authorization from the investor first.  This written authorization is necessary as it keeps the investor involved in the process and helps protect them against potential unsuitable investments made without their knowledge.

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 due to this fraud or negligence 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 James Parrelly, please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.