FINRA Fines and Censures Morgan Stanley Smith Barney over Supervisory Issues
According to the Financial Industry Regulatory Authority, Morgan Stanley Smith Barney LLC (CRD #149777, Purchase, New York) was issued an AWC on August 22, 2017 in which the firm was censured, fined $500,000, and ordered to pay $103,219.25, plus interest, in restitution to investors.
FINRA has not imposed undertakings in this matter because the firm has addressed the supervisory and training deficiencies FINRA identified during its reviews. Morgan Stanley reportedly consented to the sanctions that it routinely failed to show the correct order receipt time and/or execution for trades in the firm’s “verbal trade” process.
According to FINRA, the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations, and/or FINRA rules.
The findings also stated that the firm allegedly failed to execute customer orders in OTC securities after it traded each subject security for its own marketmaking account at a price that would have satisfied each customer’s limit order.
FINRA found that the firm failed to execute orders in preferred securities fully and promptly, and in some of those instances, failed to use reasonable diligence to ascertain the best inter-dealer market. Additionally FINRA said the firm failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions.
For FINRA’s full findings see FINRA Case #2012034714701.
Investigating Potential Claims
The White Law Group is investigating the liability that Morgan Stanley Smith Barney LLC may have for losses sustained by their clients. Brokerage firms are required to adequately supervise their agents to ensure they are complying with FINRA rules. If it is determined that the broker dealer failed to supervise their agents, they can be held responsible for losses in a FINRA arbitration claim.
Are you concerned about your investment losses with Morgan Stanley Smith Barney LLC? The attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit www.whitesecuritieslaw.com.