February 5, 2021
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Jay Tomlinson, a registered representative who has been associated with R.F. Lafferty & Co. in New York City as a General Securities Representative and Principal since 2013.
FINRA alleges in the AWC that in late September 2015, Tomlinson began managing three customer accounts from a third-party investment advisor who utilized a high-frequency, intra-day trading strategy focused on pharmaceutical stocks. Tomlinson continued with this strategy, but he allegedly exercised discretion without written authorization from R.F. Lafferty when placing 379 trades in these customers’ accounts between October 2015 and April 2016. FINRA Department of Enforcement alleges in the AWC that Tomlinson disobeyed the directive of his member firm not to place discretionary trades in customer accounts. Further, Tomlinson allegedly charged commission for each trade in these accounts, unlike the original third-party investment advisor who traded on a fixed-fee arrangement. Based on the foregoing, Tomlinson violated NASD Rule 2510(b) and FINRA Rule 2010.
According to FINRA, Tomlinson also failed to mark those trades as discretionary and mismarked order tickets for 14 of the trades as “unsolicited,” causing R.F. Lafferty to maintain inaccurate books and records. Thus, Tomlinson also violated FINRA Rules 4511 and 2010.
Without admitting or denying any allegations made against him, Jay Tomlinson consented to a three-month suspension from associating with any FINRA member firm in any capacity and a $7,500 fine.
Tomlinson’s FINRA BrokerCheck report reveals that he signed another AWC in November 2012 consenting to a 30-day suspension and $7,500 fine for failing to timely respond to FINRA requests for information and documents. FINRA then revoked his registration in May 2013 after Tomlinson failed to pay the $7,500 fine. This report also shows a tax lien of $2,081,299 brought to FINRA’s attention on May 30, 2013.