Stop and Stop Limit Orders – FINRA Regulatory Notice 12-50

Stockbroker Law - Monday, March 25, 2013
Stop and Stop Limit Orders – FINRA Regulatory Notice 12-50

The Securities and Exchange Commission has approved amendments relating to stop orders in customer accounts, with an effective date of January 21, 2013.  This Regulatory Notice addresses new FINRA Rule 5350 (Stop Orders), which replaces the stop order provisions of FINRA Rule 6140(h).

 

Many investors have been lulled into a sense of false security when their brokers have advised their clients that they have been pursuing a general (or vague) strategy of assuring the sale or purchase of securities at, above, or below a specified price.

 

So what is a stop order?  It is an order to buy or sell a security that becomes a market order to buy or sell when a transaction occurs at or above (below) the stop price. 

 

A stop limit order is an order to buy or sell that becomes a limit order to buy or sell at the limit price when a transaction occurs at or above (below) the stop price.

 

We offer a free initial consultation to investors who feel they have been victimized as a result of failure to implement stop order or stop limit order instructions in their accounts.

 

The Law Offices of Timothy J. O’Connor is one of the only law firms practicing securities law in the Tri-City Capital District of Albany, Schenectady and Troy.  We also represent victimized investors throughout the rest of New York State, including Buffalo, Binghamton, Syracuse, Watertown, Utica, Kingston, New York City/Manhattan, Long Island, and everywhere in between, as well as in the surrounding states of Massachusetts, Vermont, New Hampshire, Connecticut, and New Jersey.

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