A Financial Industry Regulatory Authority arbitration panel has ruled in favor of a former Oppenheimer financial advisor seeking to wipe out the record of a customer complaint alleging an unauthorized sale of stock in a discretionary account — a sale that yielded about several times its value in profit.
At issue were 750 shares of Peloton stock bought in April 2020 and sold roughly seven months later “for slightly more than three times the purchase price,” according to a Finra arbitration award document published earlier this month.
A client of Kenneth South said the advisor “knew to contact [the Customer] prior to selling a position in discretionary managed account and should have gotten the authorization for the sale, yet did not,” according to the complaint cited in the document. The Finra document does not identify the customer. ,
South has been in the financial services industry since 985 and is registered in Newport Beach, California. Since the complaint, he has left Oppenheimer, where he worked from 2006 to 2021, and now works with LPL, according to BrokerCheck.
During the Finra hearing, the customer opposed South’s request for expungement, while Oppenheimer did not, according to the award document.
Last week, the Finra arbitrators noted South's “undisputed testimony” that any stock the customer wanted to remove from South’s discretion needed to be removed from the Omega account, according to the document.
The arbitrators added that even the customer wrote in an email to Oppenheimer that South had “free rein to trade stocks without needing my approval” in the Omega account.
As a result, the allegations that South didn’t have the authority to sell the Peloton stock “is factually impossible, clearly erroneous and false,” the arbitrators wrote.