Morgan Stanley (NYSE:MS)
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6 Months : From Aug 2019 to Feb 2020
("Massachusetts Fines Morgan Stanley for Lack of Broker Oversight Case," at 11:32 a.m. ET, incorrectly stated that Morgan Stanley didn't investigate Justin Amaral's activities after a customer's accountant filed a complaint and presented the actions as allegations. The corrected version follows.)
By Dave Sebastian
The Massachusetts' state secretary ordered Morgan Stanley (MS) to pay $382,500 for not supervising one of its broker-dealer agents who hiked commission fees on investor accounts through excessive trading in a practice known as churning.
Massachusetts Secretary William Galvin said four Massachusetts investors lost money through their trades executed by Justin Amaral, a former Morgan Stanley agent. The state fined Morgan Stanley $200,000 and is also ordering the bank to pay $182,500 to the four investors.
Mr. Galvin's office said Morgan Stanley failed to supervise Mr. Amaral's trading activity and didn't investigate his activities until after a customer's accountant filed a complaint in April 2014.
According to the order, Morgan Stanley started investigating Mr. Amaral's trading activities after a customer's accountant found that Mr. Amaral was designated as the executor of an estate and as a beneficiary of the customer's will. Mr. Amaral hadn't disclosed such a relationship to Morgan Stanley, according to Mr. Galvin's office.
"We are pleased to resolve this matter which arose out of conduct from a financial advisor whose employment ended in May 2014," Morgan Stanley said in a statement.
The Financial Industry Regulatory Authority has barred Mr. Amaral from acting as a broker. Attempts to reach Mr. Amaral weren't immediately successful.
Write to Dave Sebastian at email@example.com
(END) Dow Jones Newswires
October 30, 2019 14:07 ET (18:07 GMT)
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