If you have lost money with Douglas Stopkey, contact New York securities arbitration lawyers Iorio Law PLLC for a free and confidential evaluation of your account.

Douglas Stopkey and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on October 26, 2020, over allegations related to Stopkey’s conduct between January 2016 and June 2018. Specifically, FINRA alleged:

• Mr. Stopkey executed nearly 300 unauthorized trades in seven accounts belonging to four senior customers.
• He exercised discretion without written authorization by the four senior customers for the accounts to be discretionary.
• Mr. Stopkey lacked his firm’s approval for the accounts to be discretionary.
• He mismarked 65 solicited orders as “unsolicited.”
• M. Stopkey caused Merrill Lynch to maintain inaccurate books and records.

Prior to the FINRA AWC, Stopkey was fined $10,000 by the Division of Securities and Retail Franchising of the Commonwealth of Virginia’s State Corporation Commission. The allegations involved the same misconduct as investigated by FINRA.

Under FINRA rules, to exercise discretionary power, a broker must have prior written authorization from a customer before executing a trade. Prior written consent involves a customer signing a discretionary disclosure that allows the customer also to place limits on the broker’s discretion. Additionally, the firm must approve the account to be discretionary. A broker can then use his discretion and place trades without obtaining the customer’s authorization first. However, without such written authorization by the customer and firm approval, a broker who receives verbal authorization from a client to execute a trade and makes the transaction violates FINRA rules. Oral permission to execute a trade is not sufficient.

In non-discretionary accounts, customers retain discretion, and brokers must always obtain their customer’s permission before placing a trade.

Financial Advisor Douglas Stopkey (CRD#: 2209717)

Mr. Stopkey inaccurately answered compliance questionnaires in March 2016, March 2017, and March 2018, even suggesting to the firm’s compliance department that a security trade in question was a customer’s idea.

Under applicable securities laws and FINRA rules, firms must maintain books and records, including a “memorandum of each brokerage order.” A broker who mismarks an order as “unsolicited” causes a firm to create inaccurate books and records. Mr. Stopkey mismarked 65 trades as “unsolicited” even though he did not discuss the trades with the customers. A “solicited” trade is essentially a trade that was the broker’s idea, and it should be marked as such. A trade confirmation reflecting a “solicited” trade as “unsolicited” should be a red flag to investors.

If you have lost money with Douglas Stopkey or Merrill Lynch, contact New York securities arbitration attorney August Iorio of Iorio Law PLLC. August Iorio can be reached at info@iorio.law or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

About Iorio Law PLLC

Iorio Law PLLC is a securities arbitration law firm located in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.

We have over 15 years of experience as securities arbitration lawyers and have helped investors recover investment losses in over 800 cases. The firm will file a FINRA securities arbitration claim on your behalf on a contingency fee basis to try to recover your losses. If we do not obtain a recovery, you do not owe us a legal fee.

This blog was published by August Iorio when he was a Partner at his previous firm and has been updated to reflect Iorio Law PLLC’s new contact information. To evaluate any potential claims, contact securities arbitration lawyer August Iorio for a free consultation contact Iorio Law PLLC at info@iorio.law or (646) 330-4624.