According to FINRA, Stephen E. Trask has been assessed a deferred fine of $5,000 and suspended for 30 days for exercising discretionary authority in customer accounts without proper authorization.

Trask entered stop-loss orders in customer accounts without having prior written authorization from the customers to exercise discretion. His member firm prohibited representatives from exercising discretionary authority in accounts and had not accepted the customers' accounts as discretionary.

Discretionary trading authority allows a broker to make investment decisions on behalf of a customer without obtaining specific approval for each transaction. Because of the significant trust this requires, securities regulations require that discretionary authority be granted in writing and that the firm specifically approve the account for discretionary trading.

Stop-loss orders are designed to limit losses by automatically selling a security when it reaches a specified price. While often beneficial, placing such orders without customer authorization constitutes exercising discretion because the broker is making decisions about when and at what price to sell customer securities.

The suspension was in effect from March 3, 2025, through April 1, 2025.

What Investors Can Learn: Investors should understand whether their accounts are discretionary or non-discretionary. In a non-discretionary account, brokers must obtain your approval before executing trades. If you notice trades you did not specifically authorize, contact your broker and the firm's compliance department.