Chicago-based securities and investor protection law firm Stoltmann Law Offices, P.C., is currently investigating claims involving William Edward Torriente (Eddy Torriente) in connection with allegations he engaged in unauthorized trading. Eddy Torriente, who was employed with Comerica Securities from 2011 to September 2020, worked out of a branch office in Scottsdale, Arizona. According to public reports, Eddy Torriente voluntarily resigned from Comerica on September 21, 2020 while undergoing an internal investigation by Comerica into allegations made by a client that Torriente placed unauthorized transactions in the client’s accounts. Typically, if a complaint by an investor client is unfounded, the advisor doesn’t leave the firm. According to FINRA, the complaint was “denied” by the firm but the timeline indicates there was very little time between the receipt of the complaint and the firm “denying” it. Even more intriguing, Torriente “voluntarily resigned” before this client complaint was even received. Mr. Torriente is now registered as an investment adviser representative for Wealthsource Partners, but is currently not a registered representative of a FINRA broker/dealer. If you or someone you know had dealings with Mr. Torriente and believe he executed trades in your account on an unauthorized basis, you should contact Stoltmann Law Offices for a consultation.
Unauthorized trading is a fundamental violation in the securities industry. These claims take multiple different shapes. The most obvious form is when a financial advisor, who does not have formal “discretion” in a customer’s account, goes ahead and places trades, either buys/sells stocks, bonds, options, mutual funds, etc., without first receiving approval from the client. These claims can also take the form of a failure to execute or failure to follow a client’s instructions. If, for example, a client tells a broker to buy 100 shares of Apple, and the broker doesn’t do it, that is a failure to execute, and a form of unauthorized trading. These claims can become even more nuanced however and could involve situations where the broker fills some orders as instructed, but ignores others, or simply uses his discretion on what orders to execute. Financial advisors simply cannot exercise this sort of discretion in a client’s account without formal, written agreements providing that discretion.
A broker who trades on an unauthorized basis violates several FINRA Rules and state securities regulations in doing so. For example, in Arizona, it is a violation of the Arizona Securities Act to trade on an unauthorized basis. See R14-4-130(16) which specifically identifies “Making unauthorized use of of securities or funds of a customer…for personal benefit” as an unethical practice in violation of the Arizona Securities Act, A.R.S. §§ 44-1961(A)(13) and 44-1962(10). Brokers traditionally trade on an unauthorized basis for one reason – to generate commissions. Further, FINRA Rule 2010 prohibits unauthorized trading because such a practice is considered to be inapposite to the concept of commercial honor and just and equitable principles of trade.