Following a customer complaint, FINRA began reviewing Schreiber’s business practices. They found that from 9/2017 through 9/2021, Schreiber exercised discretionary trading without written authorization from 27 customers for nearly 300 transactions. MB Schreiber did not obtain written consent to trade, nor did he have any authorization from Aegis to do so. During this time frame, Schreiber also incorrectly marked 181 of these trades as “unsolicited,” when he solicited them himself.
Additionally, Schreiber frequently used personal email addresses to conduct business and communicate with these customers, which is prohibited by both Aegis policy and under FINRA Rule 4511. Brokers are required to use the firm’s systems for communications. He also failed to disclose the use of his personal email address to Aegis. By using a non-authorized email address, and inaccurately recording trades as “unsolicited,” Schreiber and Aegis had inaccurate and incomplete documentation for these customers.
In its disciplinary action, FINRA issued a $5,000 fine and a three-month suspension, from 11/21/2022 through 2/20/2023. On 11/18/2022, Aegis ended their business relationship with Schreiber and allowed him to resign following the FINRA action.
FINRA previously suspended Schreiber after he borrowed money from a customer while working at Newbridge. The firm prohibited loans of this nature, and MB Schreiber failed to notify the firm of the loan. He was fined $10,000 and suspended for two months, from 04/05/2010 to 06/03/2010.
Schreiber was also previously terminated by Summit Brokerage Services on 10/15/2007 after accepting a client’s beneficiary designation to a variable annuity without disclosing it to the firm. He also allegedly withheld a customer’s statements without written instructions from the customer.
What Is “Discretionary Trading?”
Does your broker have your permission to trade in your account without asking? Are you sure they do or do not?
Brokers are required to ask your permission to trade in your account unless you give them written permission to do so. This is not only a FINRA regulation, it’s also required by most broker-dealers.
It’s not enough for you to say something like, “sure, do whatever you think is best,” or some other generalized statement on the phone. Firms require written authorization for a broker to trade without calling and asking you before making that trade. Chances are your brokerage has a specific form they require you to fill out and sign first. The brokerage firm must also approve the authorization.
How do you know if you’ve given a broker discretionary authority to trade for you? Ask them and ask them to show you the form you signed if you don’t remember doing so. Some less-than-honest brokers may not want to tell you, may do unauthorized trading anyway, or forge a customer’s signature. FINRA’s webpage offers additional advice on discretionary trading, including reaching out to the broker’s compliance officer if necessary.
Did You Invest With MB Schrieber?
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.