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

Joseph Yanofsky is a Colorado based securities broker. He has worked in the securities industry for thirty-nine years. During his career, he has been registered with five different securities firms.

His Registrations

  • Merrill Lynch (1979-1982, 1990-2015)
  • E.F. Hutton & Company (1982-1983)
  • Painewebber Incorporated (1983-1987)
  • Hanifen, Imhoff Inc. (1987-1990)
  • First Financial Equity Corporation (2015-Present)

The Allegations

  • In September 1983, a customer alleged that Joseph Yanofsky made material misrepresentations, churned their account, and recommended unsuitable investments. This case was settled for $20,000 in damages.
  • In May 2015, Joseph Yanofsky was discharged from his position at Merrill Lynch. This followed allegations that he exercised discretion in non-discretionary accounts and provided inaccurate responses to related internal compliance.
  • In June 2015, a customer alleged that Joseph Yanofsky failed to follow instructions and executed unauthorized trades. This case was settled for $500,000 in damages.
  • In July 2015, an attorney, on behalf of a customer, alleged that Joseph Yanofsky failed to follow instructions and executed unauthorized trades. This case was settled for $35,000 in damages.
  • In August 2015, a customer alleged that Joseph Yanofsky recommended unsuitable investments and made material misrepresentations. This case was settled for $75,000 in damages.
  • In September 2017, Joseph Yanofsky was officially sanctioned by FINRA. This was due to the above mentioned allegations that he exercised discretion in customer accounts without written authorization from the customer or his member firm having accepted the accounts as discretionary. Due to these allegations, he was fined $10,000 and suspended from acting as a securities broker in any fashion for a period of twenty business days.

Unauthorized Trading

There is a misconception in the securities world among some investors that hiring a securities broker relinquishes control over their account. This is not the case. Investors still hold complete control over what they are ultimately invested in. Securities brokers are required to obtain an investor’s authorization before they execute a transaction on their behalf. When this procedure is circumvented by less than scrupulous securities brokers, it can often lead to investors experiencing significant financial loss.

There is a trading practice, known as discretion, that allows brokers the opportunity to trade an investor’s account without having to receive their authorization for every trade. Before a broker can begin this method of trading, the account holder must first provide them with express written permission to do so. The broker’s member firm must also deem the account in question as one that is suitable for discretionary trading.

Discretion can be a very slippery slope because of how much control it gives to securities brokers. Unscrupulous brokers with discretionary authority over an account now have an easier time trading the account unsuitably. This includes placing the investor in investments they are not financially suited for, or trading the investor’s account excessively. Both of these acts can prove detrimental to investors.

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 Yanofsky, 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.