Bill King Suspended by FINRA for Alleged Use of Discretion

Bill King (CRD #: 1432593), a broker formerly registered with Merrill Lynch, Pierce, Fenner & Smith, has been suspended by FINRA, according to his BrokerCheck record, accessed on May 18, 2025. Read on if you have questions about his alleged conduct as a broker.

FINRA Suspension

On March 3, 2025, Bill King consented to the entry of findings that he allegedly exercised discretion in four customers’ accounts without prior written authorization.

According to a Letter of Acceptance, Waiver & Consent (AWC), Bill King allegedly exercised his trading discretion when placing 204 trades in six accounts held by four clients between January 6, 2021, and January 5, 2023.

While he had allegedly discussed investment strategy with these clients, they had allegedly not provided written authorization for him to exercise discretion and Merrill Lynch had not accepted these accounts as discretionary.

The AWC concluded that these allegations constituted violations of FINRA Rules 3260(b) and 2010.

FINRA Rule 3260

FINRA Rule 3260 limits brokers to exercising their trading discretion in pre-approved discretionary accounts. These accounts must be approved for discretionary trading by both the client and the firm.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

Sanctions

Bill King consented to the following sanctions:

• 30-calendar-day suspension from associating with FINRA members
• $5,000 fine

His suspension ran from March 3 to April 1, 2025. You can read a copy of the AWC here.

Investor Disputes

On June 5, 2024, multiple investors alleged that Bill King executed unauthorized trades and an unsuitable investment strategy, made misrepresentations and omitted material facts, and did not act in their best interest in 2020. This dispute is currently pending.

Disputes filed on August 27, 2023, and January 19, 2024, alleged that Bill King recommended unsuitable investments and failed to disclose their risks. These disputes were settled for a total of $330,000.

In a dispute filed on July 24, 2023, an investor alleged that Bill King executed unauthorized trades, recommended unsuitable investments and made misrepresentations. They sought $4 million in damages and received a settlement of $590,000.

Two disputes, filed on July 18, 2023 and February 8, 2024, investors alleged that Bill King engaged in unsuitable and unauthorized options trading. Investors received settlements totaling $290,000.

On June 8, 2023, an investor alleged that Bill King executed unsuitable and unauthorized transactions, and misrepresented an options strategy. This dispute was settled for $250,000.

On May 23, 2023, an investor alleged that Bill King made unsuitable use of margin and engaged in unsuitable options trading. The client received a settlement of $65,000.

Disputes filed on March 6 and July 28, 2023, named Bill King in allegations involving misrepresentation. The July 28 dispute further alleged the recommendation of an unsuitable options strategy. These disputes were settled for a collective $250,000.

On November 21, 2022, an investor filed a dispute alleging that Bill King engaged in unauthorized options trading from June through September 2022. This dispute was settled for $100,000.

On August 17, 2022, multiple investors alleged that Bill King failed to act in their best interest by enrolling their brokerage account into a managed strategy, but did not implement risk management procedures.

The clients alleged that their portfolio was left open to market volatility from June 2019 through July 2022. They received a settlement of $212,500.

Regulation Best Interest

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

FINRA 2020

FINRA Rule 2020 forbids the use of manipulative or deceptive tactics, like the misrepresentation or omission of material facts, as they relate to the purchase and sale of securities.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to tailor their investment recommendations to suit investors’ profiles, which contain information about their age, risk tolerance, and tax status.

Investors who rely on brokers for recommendations may be able to recover their losses by pursuing FINRA arbitration.

Resignation from Merrill Lynch, Pierce, Fenner & Smith

On April 21, 2023, Bill King resigned from Merrill Lynch, Pierce, Fenner & Smith following allegations that he engaged in unsuitable and unauthorized trading in client accounts.

Denied Disputes

In 2023, investors filed ten disputes variously alleging unauthorized trading, misrepresentations, and/or violations of the suitability rule. All of these disputes were denied.

However, investors should know that firms don’t need to allow an external review before denying a dispute. Investors can still seek out FINRA arbitration following a denial and potentially recover their losses.

Background Information

Bill King has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination
• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 31 – Futures Managed Funds Examination
• Series 7 – General Securities Representative Examination

He previously worked for Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691).

Kurta Law Can Help

If you worked with Bill King and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.