FINRA has suspended financial advisor Douglas William Stopkey from the securities industry for a 30-day period, which began on November 16, 2020, and runs through December 15, 2020. Douglas Stopkey was registered with Merrill Lynch, Pierce, Fenner & Smith in Richmond, VA, from March 1992 until September 2018, when he was terminated. Since then, he has been registered with Davenport & Company LLC in Richmond, VA.
If you have lost money with Douglas Stopkey, contact New York securities arbitration lawyers Iorio Altamirano LLP 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 lawyer Jorge Altamirano of Iorio Altamirano LLP at firstname.lastname@example.org or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.