Joseph Peduzzi: Why Did Morgan Stanley Fire Pittsburgh Advisor?

Pittsburgh financial advisor Joseph Peduzzi (CRD# 2350899) was recent terminated from a former member firm in connection with alleged rule violations. Records provided by the Financial Industry Regulatory Authority show that he is currently a broker and an investment advisor with Kestra Investment Services and Kestra Advisory Services, respectively, having previously been registered with Morgan Stanley.

Mr. Peduzzi’s BrokerCheck report describes his departure from his former member firm. According to the disclosure, Morgan Stanley fired him in connection with allegations he “conducted transactions in clients’ accounts without receiving verbal confirmation immediately beforehand, as well as failing to timely escalate a client complaint.” The disclosure provides no additional information.

Investors should be aware that FINRA Rule 3260 outlines specific conditions under which brokers like Mr. Peduzzi may participate in discretionary trading, the execution of securities transactions without prior consultation with the investor. As FINRA explains in its investor resources, discretion “generally means the broker can decide at any time how much of a stock, bond or other security to buy or sell, and at what price, without customer input.” Rule 3260 states, however, that the broker is forbidden from using discretionary authority without the investor’s prior written authorization and the firm’s approval of the account in question as discretionary. The firm’s acceptance must be “evidenced in writing by the member or the partner, officer or manager, duly designated by the member.” Even in instances in which brokers receive authorization from firm and customer, Rule 3260 prohibits them from effecting transactions “which are excessive in size or frequency in view of the financial resources and character of such account.” Brokers who improperly engage in discretionary trading may be held liable.

According to the Financial Industry Regulatory Authority, Joseph Peduzzi holds nine years of securities industry experience. Based in Pittsburgh and Sewickley, Pennsylvania, he has been registered as a broker and an investment advisor with Kestra since March 2023. His registration history includes Morgan Stanley (Pittsburgh, Pennsylvania; 2019-2023) and The Tiberius Qualified Master Fund (George Town, Grand Cayman; 2006-2011). His credentials include the passage of four securities industry qualifying exams: the General Securities Representative Examination, or Series 7; the General Securities Representative Examination, or Series 7TO; the Securities Industry Essentials Examination, or SIE; and the Uniform Combined State Law Examination, or Series 66. He is licensed in Pennsylvania, Texas, and Virginia. (Information current as of April 1, 2023.)

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