Merrill Lynch, a stalwart name in American finance and part of Bank of America’s vast empire, faces fresh scrutiny in Columbia, Maryland, after a complaint was filed in September 2025 against one of its most experienced advisors: Stephen Hlibok. With a career spanning 38 years, Stephen Hlibok (CRD# 1728900) has served as both a broker and investment advisor at Merrill Lynch, Pierce, Fenner & Smith Incorporated since the late 1980s. Despite his long-standing professional record, he now finds himself at the center of a significant dispute involving unauthorized trading and claimed damages of $337,668.75.
Unpacking the Recent Allegation Against Stephen Hlibok
According to records maintained by the Financial Industry Regulatory Authority (FINRA), the complaint was filed in September 2025 and remains unresolved as of November 3, 2025. The claim alleges that Stephen Hlibok executed unauthorized trades—specifically involving high-risk over-the-counter (OTC) stock products—on behalf of a client without obtaining appropriate authorization. For investors and observers alike, this case is a reminder of the importance of vigilance, even when working with advisors affiliated with well-established firms like Merrill Lynch. The full details, including any defenses or resolutions, are still unfolding.
What Are Unauthorized Trades and Why Do They Matter?
Unauthorized trading occurs when a financial advisor or broker makes investment transactions in a client’s account without prior consent or without obtaining written discretionary authority. For most investors, authority over trades is non-negotiable: unless they’ve specifically given written permission for an advisor to manage investments on their behalf, every trade should be approved in advance. When this process breaks down, the consequences can range from unexpected losses to legal disputes.
In the case against Stephen Hlibok, the primary concern involves OTC stocks. These are securities traded outside the major exchanges like the New York Stock Exchange or Nasdaq. While OTC stocks can serve legitimate investment purposes, they generally carry higher risks and less transparent regulatory oversight. Advisors typically need to take extra care when handling these securities, and clients should be alerted and well-informed before any transactions occur.
Stephen Hlibok’s Professional Background and Prior Complaints
Stephen Hlibok boasts an extensive career in the securities industry spanning nearly four decades. Based in Columbia, Maryland, he has been registered as a broker with Merrill Lynch since 1987 and as an investment advisor since 1990. His credentials include successful completion of several core industry exams:
- Securities Industry Essentials Examination (SIE)
- General Securities Representative Examination (Series 7)
- Uniform Securities Agent State Law Examination (Series 63)
- Uniform Investment Adviser Law Examination (Series 65)
Additionally, Stephen Hlibok holds licenses in 37 states, attesting to a broad and longstanding practice serving clients across much of the country. His FINRA BrokerCheck record, an essential tool for investors reviewing advisor backgrounds, lists not only the current pending claim but also a previous customer dispute from 2003. In that earlier instance, the complaint involved allegations of unsuitable investment recommendations, also related to OTC stocks. The client sought $592,000 in damages. At the time, the firm denied the claim, and Stephen Hlibok stated that the situation was more nuanced than the complaint suggested, noting that the client transferred in the relevant stock from another firm.
Patterns and Perception: Why Previous Disputes Matter
While not every complaint is validated, industry regulators and vigilant investors alike pay close attention when a pattern appears in an advisor’s complaint record, even if the years between incidents are long. Patterns involving similar products or issues—such as OTC stocks in Stephen Hlibok’s case—sometimes suggest recurring risks or underlying gaps in procedures or supervision. Though the 2003 complaint was denied and involved different allegations, its thematic connection to the 2025 dispute will likely be noted by regulators, arbitration panels, and potential new clients conducting due diligence.
Industry Context: Investment Fraud and Bad Advice Risks
Investment fraud and advisor misconduct are persistent concerns, even at top firms. According to the U.S. Securities and Exchange Commission, investment-related fraud costs everyday investors billions each year—from Ponzi schemes to unsuitable recommendations and unauthorized trades. More specifically, a study cited by Bloomberg found that roughly 7% of financial advisors have misconduct records, yet many continue to practice and may move to new firms, sometimes carrying their history with them.
Unauthorized trading—such as what has been alleged in the case of Stephen Hlibok—not only violates a client’s trust but can also breach fundamental regulations meant to provide a baseline for investor protection. Most complaints arise from misunderstandings or mistakes, not outright malice, but for affected clients, the outcomes can be equally damaging. Even advisors with stellar reputations and decades of experience, like Stephen Hlibok, are not immune from claims and scrutiny.
Regulatory Standards and Supervision at Merrill Lynch
Merrill Lynch is expected to maintain robust compliance and supervisory systems. As a leading wirehouse, it is closely monitored both internally and by external regulators. Supervisory failures—or even the perception that an advisor has acted outside the bounds of firm policy—can deliver serious consequences for the company, the advisor, and affected clients.
Under FINRA Rule 2010, all industry members must “observe high standards of commercial honor and just and equitable principles of trade.” More specifically, executing unauthorized trades constitutes a clear violation. It does not matter whether the trade ultimately profits the client or results in losses; what matters most is that client consent must always come first.
Consequences and Takeaways for Investors
If the arbitration panel ultimately decides in favor of the client in the Stephen Hlibok dispute, the consequences could be significant. Stephen Hlibok and Merrill Lynch could be responsible for paying damages, as well as incurring reputational and regulatory risk. Adverse awards remain a permanent part of an advisor’s FINRA BrokerCheck record, visible to anyone who takes the time to review their background. In some cases, career prospects, state licenses, and registration at top firms could all be affected.
For investors, this high-profile case reinforces several foundational steps for financial self-defense:
- Review your advisor’s background: Use free tools like FINRA BrokerCheck and independent resources such as Financial Advisor Complaints to identify patterns of concern before entrusting significant assets.
- Examine your account statements: Regularly reviewing statements can help spot unauthorized activity before it snowballs.
- Document your communications: Maintain thorough records, including emails, texts, and written notes, for every significant investment decision or instruction.
- Know your account permissions: Make sure you understand the level of discretion you have granted—are you required to approve every transaction, or does your advisor have freedom to act?
- Ask questions promptly: The sooner you notice and address a red flag, the easier it is to resolve errors and minimize losses.
| Advisor Name | Stephen Hlibok |
|---|---|
| CRD Number | 1728900 |
| Firm | Merrill Lynch (Columbia, MD) |
| Experience |
