Former Cambridge Investment Research Financial Advisor David Melilli Barred by FINRA After Allegations of Exercising Discretion Without Authorization That Resulted In Investment Loss
David Melilli (CRD#: 5254172) is a registered Investment Advisor and previously registered Broker.
He entered the securities industry in 2006 and previously worked for Cambridge Investment Research, Inc.; LPL Financial, LLC; Sagepoint Financial, Inc.; Janney Montgomery Scott, LLC; Morgan Stanley & Co., Inc.; and Lincoln Financial Advisors Corp.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in November 2021, FINRA sanctioned David Melilli, barring him from all capacities indefinitely beginning November 8, 2021. The FINRA sanction states, “Without admitting or denying the findings, Melilli consented to the sanction and to the entry of findings that he refused to produce documents and information requested by FINRA in connection with its investigation into, among other things, whether he exercised discretion without written authorization in a client’s account.”
For a copy of the FINRA sanction, click here.
In addition, David Melilli has been the subject of three customer complaints, including one that remains pending, including the following:
- September 2020—”Clients allege unauthorized trading.” Damages of $5,000 are requested. The customer dispute is pending.
- September 2020—”Client alleges that RR made risky investments that were not fully understood. Additionally, client has concerns that management fees may not have been assessed correctly and is unsure if all of his accounts transferred to and from firm.” The customer dispute was denied.
- February 2020—”Unauthorized trading, breach of fiduciary duty, unsuitability, negligence, common law fraud, 10(b) violation and churning alleged.” Damages of $140,000 are requested. The customer dispute is pending.
- January 2020—”Representative placed discretionary trades without authority.” David Melilli was discharged by Cambridge Investment Research, Inc.
- May 2019–A financial disclosure (compromise) was resolved through a direct repayment procedure.
For a copy of David Melilli’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at email@example.com.