Arun Kumar Aggarwal Banned: FINRA’s Forceful Action Sends Shockwaves

Arun Kumar Aggarwal of Raleigh, North Carolina, was the target of regulatory action on October 11, 2023, when the Financial Industry Regulatory Authority (FINRA) filed an Administrative Waiver and Consent (AWC) against him. Aggarwal was subject to severe penalties by the AWC, a regulatory agreement, indicating the seriousness of the alleged misbehavior.

Arun Kumar Aggarwal agreed to a deferred fine of $7,500 and a two-month ban from association with any FINRA member in any capacity by accepting the terms without acknowledging or disputing the findings. Given the gravity of the accusations, the deferred fine functions as a monetary punishment for the regulatory violations.

The conclusions presented in the AWC provided insight into Aggarwal’s use of his discretionary power to make trades in a customer’s account without first obtaining the required written consent. Remarkably, this use of discretion took place without the formal acceptance of the account as discretionary by his member firm.

Concerns concerning adherence to regulatory standards intended to protect investor interests and guarantee transparent and accountable trading practices are raised by the breach of this important protocol.

An important step that emphasizes the regulatory commitment to maintaining industry standards is the two-month ban from association with any FINRA members. Aggarwal accepts the FINRA-imposed penalties and admits to breaking the rules by agreeing to the sanctions.

This case serves as a reminder of how crucial it is to follow established protocols and obtain the appropriate authorization before using discretionary authority on customer accounts. The purpose of the regulatory actions against Aggarwal is to uphold the values of accountability, transparency, and investor protection in the financial sector.

The findings of the recent investigation indicate that, although the customer was aware of Aggarwal’s role in carrying out trades on the account, there was a notable inconsistency in securing prior written consent for these transactions.

This protocol violation sparked questions about Aggarwal’s moral behavior in handling the client’s assets. The results highlighted a serious procedural violation since the client had not given Aggarwal official authorization to conduct trading operations on their behalf.

The investigation also uncovered a concerning practice in which Aggarwal assisted in the upkeep of false books and records concerning the discretionary trades. In particular, these trades were falsely identified as unsolicited, which led to an inaccurate portrayal of the nature of the dealings. In addition to breaking regulatory requirements, this intentional misclassification jeopardized the accuracy of the company’s financial records.

Arun Kumar Aggarwal has been placed under suspension, which is in effect from October 16, 2023, to December 15, 2023, as a result of these findings. This temporary ban highlights the regulatory commitment to maintaining accountability and transparency in the financial services industry while acting as a disciplinary measure to address the identified violations. The suspension period is intended to highlight the seriousness of the violations and promote a reassessment of moral behavior in the sector.

SUMMARY REPORT: ARUN KUMAR AGGARWAL

CONCLUSION

The text is an overview of the disciplinary action that FINRA brought against Arun Kumar Aggarwal, a former broker who engaged in the use of discretionary authority to make trades in a client’s account without the client’s express written consent.

According to the text, Aggarwal gave his assent to the findings and penalties, which included a deferred fine of $7,500 and a two-month ban from association with any FINRA member in any capacity.

The text also notes that Aggarwal mislabeled the discretionary trades as unsolicited, which led the company to keep false books and records. The nature of the customer’s account and the findings of Morgan Stanley’s investigation are not mentioned in the text.