SEC Fines Daniel Pipitone and TradeZero $25,000

Daniel Pipitone (CRD #: 4516546), a broker registered with TradeZero America, has been the subject of regulatory action by the SEC, according to his BrokerCheck record, accessed on July 9, 2022. If you want to know more about Daniel Pipitone’s conduct as a broker, read on.

Cease and Desist Order from SEC

On May 24, 2022, the Securities and Exchange Commission filed cease-and-desist proceedings against Daniel Pipitone and TradeZero America, Inc.

The SEC alleges that, in late January 2021, “extraordinary” trading volume in multiple securities, popularly known as “meme stocks” led to extreme price volatility. On January 28, 2021, TradeZero’s clearing brokers allegedly instructed all of its introducing brokers, including TradeZero, to halt all purchases in GME (GameStop), AMC (AMC Entertainment Holdings), and KOSS (Koss Corporation). TradeZero allegedly failed to halt any purchases for over two hours.

The SEC further alleges that, due to pressure from the clearing broker, Daniel Piptone and the rest of TradeZero’s board of directors implemented the restriction, which was lifted by the clearing broker about ten minutes later. At that point, TradeZero allegedly resumed unrestricted purchasing of these stocks.

On January 29, 2021, Daniel Pipitone conducted an “Ask Me Anything” (AMA) on the r/wallstreetbets community on Reddit. During this AMA, he allegedly emphasized TradeZero’s resistance to restricting the purchase of these stocks but omitted that TradeZero had complied for about ten minutes.

Daniel Pipitone allegedly omitted this information again in a press release issued on January 29, 2021, which promoted TradeZero’s resistance to the clearing broker’s instructions and intended to attract more clients to TradeZero. Daniel Pipitone also allegedly used TradeZero’s supposed opposition to restricting purchases of these stocks in multiple media interviews.

During the 36 hours starting from the halt of purchasing through Daniel Pipitone’s AMA on January 29, TradeZero received new account applications in a volume more than 200 times greater than their daily average for new account applications in the entire previous year.

Daniel Pipitone acknowledged TradeZero’s temporary restriction on purchases in an interview on February 3, 2021.

The SEC concludes that these allegations constitute violations of Sections 17(a)(2) and (3) of the Securities Act on the part of Daniel Pipitone.

Sanctions

The SEC fined Trade Zero and Daniel Pipitone $25,000. 

Background Information

Daniel Pipitone has passed the following exams:

• Series 7TO – General Securities Representative Examination
• SIE – Securities Industry Essentials Examination
• Series 24 – General Securities Principal Examination

He has not worked for any other firms.

Kurta Law Can Help

If you worked with Daniel Pipitone 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.