A former registered general securities representative has agreed to pay $10,000 to settle Financial Industry Regulatory Authority charges that he violated Municipal Securities Rulemaking Board rules when he exercised discretion in a customer’s account without first obtaining written consent.
Michael G. Mancinelli, who is no longer registered with a FINRA member firm,
In so doing, Mancinelli neither admitted nor denied FINRA’s findings that he violated MSRB Rules G-8 regarding discretionary trading and G-17 on fair dealing.
From February 2017 to October 2018, Mancinelli was registered as a general securities representative through New York-based Dinosaur Financial Group, LLC. During that time, FINRA found that Mancinelli exercised discretionary trading in a customer’s account without having first obtained written authorization from the customer nor written approval from Dinosaur to do so.
FINRA also found that from Feb. 3, 2017 to Dec. 31 of that same year, Mancinelli improperly marked municipal securities transactions in the same customer’s account as unsolicited, which FINRA said caused Dinosaur’s books and records to be inaccurate.
In order to exercise discretionary power or authority for discretionary accounts, MSRB Rule G-8 requires brokers and dealers to maintain written authorization from customers.
Under MSRB Rule G-17, brokers, dealers, and municipal securities dealers must deal fairly with customers. Failing to obtain written authorization for discretionary trading is a failure to deal fairly and therefore, considered a violation of G-17.
According to FINRA, for a period of seven months, Mancinelli executed approximately 460 municipal securities transactions for a single customer.
“For many of these transactions, Mancinelli exercised discretion without obtaining written authorization from the customer to exercise discretion in this account,” FINRA found.
FINRA noted that at the behest of Dinosaur, Mancinelli eventually obtained signed, written discretionary authorization from the customer.
With regard to FINRA's finding that Mancinelli caused Dinosaur to maintain inaccurate books and records, FINRA pointed to more than 800 municipal securities purchase and sale transactions, for the same customer, that Mancinelli allegedly marked as unsolicited.
This occurred, according to FINRA, even though Mancinelli had in fact, recommended many of the purchase and sale transactions for the customer.
As a result, FINRA found that Mancinelli also violated MSRB Rule G-8, and imposed the $10,000 fine and sanctions.
FINRA records show that after leaving
Dinosaur, Mancinelli was registered at New Jersey-based Celadon Financial Group until February 2020, but has not since been registered as a broker. He could not be reached for comment.
