James Dunn (James William Dunn, Jr. CRD#: 6084258) is a former registered broker and investment advisor whose last known employer was Ameriprise Financial Services, LLC (CRD#:6363) of Vienna, VA. He was previously employed with Wells Fargo Clearing Services, LLC (CRD#:19616) of Arlington, VA, and Morgan Stanley (CRD#:149777) of McLean, VA. He has been in the industry since 2012.
In Dunn’s 10-year career, he has a total of 20 disclosures in his FINRA record. One of those disclosures is his employment separation from Ameriprise, filed on 10/19/2021. According to his entry in BrokerCheck, Dunn voluntarily resigned “while under review for potential violation of company policy related to suitability, unauthorized trades and texting with clients.” No other information is available, and there are not yet any FINRA disciplinary actions.
Of Dunn’s remaining 19 customer dispute disclosures, five are still pending. The remaining 14 have been settled with millions of dollars involved.
Of the 19 disclosures, 17 disclosures indicate that Dunn purchased securities and customer accounts without the customer’s specific written authorization. Some were inappropriate for the customers’ investment objectives, and still others were equity securities.
Two customer disputes, filed on 8/29/2021 and 9/5/2021 allege that Dunn executed unauthorized trades in foreign securities. The first dispute is still pending, and requests damages of $1,156,433.99. The later dispute requested damages of $90,541.66 and has been settled for $100,915.49.
Securities Arbitration Claims For Trading Without Authorization
Brokers are required to have specific written authorization from each of their clients that allows them to make trades in certain client accounts.
Brokers like James Dunn have many times made trades in clients’ accounts without authorization. FINRA’s Rule 3260 specifically prohibits brokers from making trades of any kind in a client’s account without their written permission. This is called a “non-discretionary account.” Any trades made without first obtaining a client’s permission is known as “unauthorized trading.” It is also a breach of fiduciary duty.
Some brokers make the trade and then get authorization after the trade is completed. This is not allowed, and is still considered unauthorized trading. But chances are the investor would not discover that trade immediately, and so would not file a complaint until later. But a delay in filing the complaint about an unauthorized transaction can indicate approval for the brokers trading. Not filing a complaint immediately may make it more difficult to prove that the transaction was indeed unauthorized.
A discretionary account allows brokers to make trades without contacting the investor first period. However, brokers are only allowed to make trades that are in the best interest of the investor.
Texting Your Broker
Another of Dunn’s transgressions was communicating by text with his clients. With so many people using text messages for short conversations, most people would find it unusual that brokers don’t send text messages. But there’s a good reason why.
Because of the transitory nature of texting, it’s not a good communications medium for securities transactions. Most firms have rules that prohibit brokers and other employees for sending text messages to clients, as well as accepting text messages for trading and other client transactions. Broker dealers are required to keep permanent records for compliance. Therefore, texting doesn’t fit that requirement. Emails, letters, and recorded phone calls on secured lines keep track of conversations and interactions with clients.
Furthermore, with so many texting scams around, and texts that come from unfamiliar places, how do you know that text is actually from your broker? With both online and offline scams, the last thing you want to find out is that that text message was actually not from your brokerage. Instead, you may have responded to a text from someone who’s looking to steal your identity, your financial information, and ultimately, your money. Scam texts can come from anywhere. If you respond to a party you assume is your broker, you could find yourself losing a considerable amount of money. The Federal Trade Commission offers additional information on text messages that are not legitimate.
Did You Invest With James Dunn?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.