Options trading can be a highly effective portfolio tool, but when a broker recommends strategies that fly in the face of a client’s risk tolerance, the financial devastation can be rapid. FINRA recently suspended former Morgan Stanley broker Theodore W. Byrer for 14 months after he allegedly executed hundreds of unsuitable options trades, violating the SEC’s Regulation Best Interest (Reg BI).

The Allegations According to a recent settlement finalized in July 2026, Byrer recommended that four customers—including a couple nearing retirement with a moderate risk tolerance—invest heavily in out-of-the-money put options on equity index funds AdvisorHub. These speculative options expired within days and required a market drop of up to 10% just to be profitable.

FINRA found that Byrer executed over 560 of these trades, racking up $279,000 in commissions while saddling the clients with $760,000 in losses. Further, FINRA alleged Byrer mismarked over 170 trades as “unsolicited” to bypass firm scrutiny and used unapproved personal text messages to communicate with clients about their accounts.

What This Means for Investors If your broker is executing rapid-fire options trades that you do not fully understand, it is a glaring red flag for unsuitability and excessive trading. Because Byrer’s actions violated Reg BI, affected investors have strong grounds to pursue financial recovery. If you suffered options trading losses under the guidance of Theodore W. Byrer or another advisor, an experienced securities arbitration attorney can help you fight to reclaim your capital.