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

Stuart Pearl was an Illinois based securities broker. He worked in the securities industry for thirty-two years. During his career, he was registered with five different securities firms. He is not currently working as a registered securities broker in any fashion.

His Registrations

  • Merrill Lynch (1986-2001)
  • Citigroup Global Markets (2001-2009)
  • Morgan Stanley (2009-2010)
  • Ameriprise Financial Services (2010-2015)
  • David A. Noyes & Company (2015-2019)

The Allegations

  • In December 2002, a customer alleged that Stuart Pearl breached his fiduciary duty, handled their account negligently, breached the covenant of good faith and fair dealing, violated NASD and NYSE rules, breached contract, and committed multiple RICO violations. This case was settled for $60,000 in damages.
  • In May 2012, customers alleged that Stuart Pearl engaged in both unauthorized trading and the unauthorized use of margin borrowing. This case was settled for $55,000 in damages.
  • In February 2013, a customer alleged that Stuart Pearl executed unauthorized trades, exercised discretion without authorization, and made unsuitable investment recommendations. This case was settled for $95,500 in damages.
  • In June 2015, Stuart Pearl was terminated from his position at Ameriprise Financial Services following allegations that he exercised discretion in non-discretionary accounts without the proper authorization. Pearl was eventually sanctioned by FINRA due to the allegations and was in turn fined $7,500 and suspended from acting as a securities broker in any fashion for a period of forty-five days.
  • In March 2019, Stuart Pearl resigned from his position at David A. Noyes & Company amidst allegations that he failed to follow his firm’s heightened supervision plan. Pearl would have been terminated had he not resigned.
  • Also in March 2019, a customer alleged that Stuart Pearl placed them in a large hedge position without their consent. This case was settled for $42,500 in damages.
  • In May 2020, customers alleged that Stuart Pearl created a margin trading account on their behalf without their consent. This case is currently pending. The customers are seeking $2,088,124 in damages.

Unauthorized Trading

There tends to be confusion among some investors regarding how the broker/investor relationship is supposed to operate. Some investors are under the impression that they have relinquished control over their account by hiring a securities broker–this is not the case. Brokers are always required to obtain their customers’ authorization every time they plan to execute a trade on their behalf. A broker’s job is to advise, and an investor has not forfeited their right to decide what they are invested in simply by hiring a securities broker. Some securities brokers will often take advantage of customers they believe either will not notice, or will not question, any trades executed without their authorization.

There is a trading practice known as discretion that allows securities brokers to execute trades in customer’s account without having every trade authorized. However, before a broker can begin engaging in this practice, they must first receive express written authorization from the account holder. The broker’s member firm must also deem the account in question as suitable for discretionary trading.

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 Stuart Pearl, please contact Oakes & Fosher for a free and private consultation. We work on a contingency basis which means there are no fees charged unless we collect for you.