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

Joseph Abbate was a New York based securities broker. He worked in the securities industry for twenty-two years. He spent his entire career registered with just two different securities firms.

His Registrations

  • Prudential Securities Incorporated (1995-2003)
  • Wells Fargo (2003-2017)

The Allegations

  • In August 2000, customers alleged that Joseph Abbate made numerous unauthorized trades, churned their accounts, and breached his fiduciary duty by allowing the customers to incur excessive margin debt. This case was settled for $90,000 in damages.
  • In October 2015, customers alleged that Joseph Abbate executed unauthorized trades and failed to disclose the commissions associated with said trades. This case was settled for $22,500 in damages.
  • In December 2017, Joseph Abbate was officially sanctioned by FINRA. The findings in this matter state that Abbate engaged in discretionary trading in the accounts of five customers without first receiving the necessary written authorization from the account holders. He also failed to have his member firm accept the accounts in question as suitable for discretionary trading. Due to these alleged actions, Joseph Abbate was fined $5,000 and suspended from acting as a securities broker for a period of twenty days.

What is Discretion?

Securities brokers are required to obtain their customers’ authorization before executing trades on their behalf. Just because an investor has hired a securities broker does not mean they have forfeited their right to decide for themselves what securities they want to be invested in. There is a trading practice known as discretion that allows brokers to execute trades in their clients’ accounts without first obtaining their authorization. However, before a broker can begin engaging in this practice, they must first receive express written authorization from the customer whose account they wish to trade. They must also have their member firm accept the account in question as suitable for discretionary trading.

Discretionary trading can be a very slippery slope. This is because it gives brokers an excess of power. Securities brokers who engage in discretionary trading have the ability to place customers in investments that they are not financially suited for. They also now have the power to trade their customers’ accounts excessively. Both of these can cause serious financial harm to investors. This is the reason that investors must provide written authorization to their broker. An investor providing verbal or implied authorization can often be the result of quick and unrepresentative explanations from the broker of what discretion actually is.

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 Joseph Abbate, 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.