According to FINRA.org, the Financial Industry Regulatory Authority (FINRA) fined Morgan Stanley’s brokerage firm $5 million for compliance failures related to the sale of initial public offerings (IPO). FINRA found that Morgan Stanley advisor’s did not distinguish between a clients” indication of interest” in an IPO and a “conditional offer” when soliciting to potential investors. From February 16, 2012, to May 1, 2013, approximately 83 IPOs, including Facebook and Yelp, may have been improperly sold to individual investors.
Furthermore, FINRA found that Morgan Stanley failed in their supervisory responsibilities. The brokerage firm did not provide training or other materials to its financial advisers to clarify the difference between “indications of interest” and “conditional offers.” It is likely that Morgan Stanley’s financial advisors and clients did not understood what type of commitment was being solicited.
When brokerage firms fail to comply with federal securities laws and FINRA regulations the firm may be forced to shut down, suspend, or face steep sanctions, as was the case with Morgan Stanley. In addition, brokerage firms that fail to adequately supervise their financial advisers may be liable for client’s investment losses. through a FINRA dispute resolution claim
If you suffered significant investment losses and would like to discuss your potential to file FINRA arbitration claim to recover those losses, please call the securities attorney of The White Law Group at (312) 238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
To learn more about The White Law Group, visit www.WhiteSecuritesLaw.com.