Prior to starting with Merrill Lynch in 2009, Zeng worked for UBS Financial Services and before that for Morgan Stanley.

If you suffered significant losses as a result of doing business with David Zeng or received an unsuitable recommendation in any of the mentioned investment categories from another stockbroker or financial advisor, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Allegedly, Morgan Stanley did not adequately disclose the risk associated with the recommended investment strategy of concentrating all of their funds into these three investments. The firm also allegedly failed to adequately disclose the risks associated with low credit ratings and long-duration bonds. Allegedly, the couple was led to believe that the Puerto Rico Bonds were constitutionally guaranteed by the Commonwealth of Puerto Rico.

Some of the bonds and bond funds currently being investigated by securities fraud attorneys are:

• Puerto Rico Sales Tax Financing Corp.
• Puerto Rico Public Finance Corp.
• Puerto Rico Electric Power Authority
• Puerto Rico Mortgage Backed & US Govt. Fund
• Puerto Rico Fixed Income Funds I-VI
• Puerto Rico AAA Portfolio Bond Funds I and II
• Puerto Rico AAA Portfolio Target Maturity Fund
• Puerto Rico Investors Bond Fund II
• Puerto Rico Investors Tax-Free Funds I-VI
• Puerto Rico GNMA &US Gov. Target Maturity Fund
• Puerto Rico Tax-Free Target Maturity Fund I and II
• Tax-Free Puerto Rico Target Maturity Fund
• Tax-Free Puerto Rico Funds I and II

If you suffered significant losses as a result of purchasing unsuitable Puerto Rico Bonds from Morgan Stanley, you may be able to recover your losses through FINRA arbitration. To find out more about your legal rights and options, contact a lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

A claim was recently filed on behalf of a former client of Luis Fernandez and Angel Canabal against UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services Inc. According to the claim, the retired client invested the majority of his life savings based on the recommendation of Fernandez in UBS proprietary bond funds, which were primarily invested in Puerto Rican debt. Allegedly, these investments were risky, illiquid and unsuitable for the investor.

The claim also alleges that the risks of the investments were not explained to the client, and that UBS made a recommendation that he borrow more money to be invested in the proprietary funds from a UBS-related company. The account was later taken over by Canabal, who allegedly told the investor that the recommendations were sound, the account wasn’t invested aggressively, and no changes were required.

According to investment fraud lawyers, under FINRA rules, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Reportedly, many UBS clients received unsuitable recommendations regarding investments that consisted largely of Puerto Rican debt.

If you suffered significant losses in UBS Puerto Rico bonds sold by Fernandez, Canabal or another UBS broker, you may be able to recover your losses. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to a recent Bloomberg article, U.S. Securities and Exchange Commission data indicate that in dozens of managed-futures funds, 89 percent of the gains were used to pay commissions, fees and expenses instead of being returned to investors. Furthermore, securities arbitration lawyers say that in light of the fees, stcckbrokers and financial advisors who recommended such funds may have and made that recommendation despite the investment’s unsuitability.

According to investment fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. If a firm fails to make suitable recommendations, investors may be able to recover losses through FINRA arbitration.

Morgan Stanley and Ceres managed-futures funds include:

• Morgan Stanley Smith Barney Spectrum Select L.P.
• Morgan Stanley Smith Barney Spectrum Strategic L.P.
• Morgan Stanley Smith Barney Spectrum Global Balanced L.P.
• Morgan Stanley Smith Barney Spectrum Technical L.P.
• Morgan Stanley Smith Barney Spectrum Currency and Commodity L.P.
• Managed Futures Premier Aventis II L.P.
• Managed Futures Premier BMH L.P.
• Managed Futures Premier Warrington L.P.
• Managed Futures Premier Graham L.P.
• Meritage Futures Fund L.P.
• LV Futures Fund L.P.
• Polaris Futures Fund L.P.

Merrill Lynch managed-futures funds include:

• ML BlueTrend FuturesAccess LLC
• ML Aspect FuturesAccess LLC
• ML Transtrend DTP Enhanced FuturesAccess LLC
• ML AHL FuturesAccess LLC
• ML Systematic Momentum FuturesAccess LLC
• ML Winton FuturesAccess LLC

Other managed-futures funds include:

• Altegris Winton Futures Fund L.P.
• RJO Global Trust
• Grant Park Futures Fund L.P.
• Campbell Strategic Allocation Fund L.P.

If you suffered significant losses because of an unsuitable recommendation of managed-futures funds, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to a FINRA news release, on August 22, 2013, the Financial Industry Regulatory Authority fined Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC for failure to provide reasonable prices in certain municipal bond customer transactions and failure to provide best execution in certain corporate and agency bond customer transactions. The firms were fined $1 million and ordered to pay restitution and interest in the amount of $188,000, above and beyond what Morgan Stanley has already paid. Stock fraud lawyers say Morgan Stanley did not admit or deny the FINRA charges.

Reportedly, the violations affected 116 corporate and agency bond customer transactions and 165 municipal bond customer transactions.

“FINRA found that Morgan Stanley failed to use reasonable diligence to ensure that the purchase or sale price to the customer was as favorable as possible under current market conditions,” the FINRA statement reads. “Morgan Stanley failed to purchase or sell bonds at prices reasonably related to the fair market value of the subject security.”

According to securities fraud attorneys, there may be many other customers of Morgan Stanley or other full-service brokerage firms that did not receive fair pricing or best execution in bonds or other securities.

“Firms must ensure that customers who buy and sell securities — including corporate, agency and municipal bonds — receive execution prices that are consistent with prices available in the marketplace,” notes FINRA’s Executive Vice President of Market Regulation Thomas Gira.

If your full-service brokerage firm has a history of best execution and fair pricing violations and your investments were affected, you may be eligible for reimbursement. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

The following firms have reportedly been subpoenaed: Merrill Lynch, Morgan Stanley, UBS Securities LLC, Charles Schwab & Co. Inc., Fidelity Brokerage Services LLC, Wells Fargo Advisors, ING Financial Partners Inc., TD Ameritrade Inc., LPL Financial LLC, MML Investor Services LLC, Commonwealth Financial Network, Investors Capital Corp., WFG Investments Inc. and Signator Investors Inc.

According to securities arbitration lawyers, the state sent subpoenas to the firms on July 10, 2013, requesting information regarding the sale of certain products to Massachusetts residents 65 or older over the last year. Nontraditional investments include private placements, hedge funds, oil and gas partnerships, tenant-in-common offerings, and structured products.

The subpoenas reportedly requested the following information related to these investments: The method of review of the sale, commissions generated, training materials, marketing materials and any relevant compliance. The firms have been instructed to respond no later than July 24.

In some cases, the recommendation of alternative investments to seniors with low risk tolerances may be unsuitable. According to investment fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

This investigation follows the recent Massachusetts crackdown on improper sales of non-traded REITs, which resulted in over $8 million in restitution to Massachusetts investors paid by six different brokerage firms. According to William F. Galvin, the Massachusetts Secretary of the Commonwealth, the recent investigations into non-traded REIT sales “heightened my concern that the senior marketplace is being targeted for the sales of these high-risk esoteric products.” The fifteen firms that were recently subpoenaed were not parties to the previous restitution payments, and the firms have not been found guilty of any wrongdoing.

About the alternative investments, Galvin stated, “While these products are not unsuitable in and of themselves, they are accidents waiting to happen when they are sold to inexperienced investors by untrained agents who push the products to score… large commissions.”

If you received an unsuitable recommendation to invest in alternative investments, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

According to FINRA’s discretionary rule, “No member or registered representative shall exercise any discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member, as evidenced in writing by the member or the partner, officer or manager, duly designated by the member, in accordance with Rule 3010.” However, according to securities arbitration lawyers, this rule doesn’t stop all brokers.

As an example, James Harman McNeill, a Morgan Stanley broker, recently was cited for unsolicited trades and discretion. Allegedly, McNeill violated FINRA Rule 2010 in November 2011 when he exercised discretionary power in Morgan Stanley customer accounts without receiving written authorization prior to doing so. Furthermore, later that month McNeill allegedly marked non-traditional Exchange Traded Fund purchase orders as “unsolicited” even though they were solicited, according to the allegations listed in the Letter of Acceptance, Wavier and Consent that was submitted in March of this year. The Financial Industry Regulatory Authority imposed a 9-month suspension and a $15,000 fine upon McNeill. According to investment fraud lawyers, mis-marked tickets can raise issues regarding inaccurate books and determining if a broker made an unsuitable recommendation.

According to a recent article in Forbes, “not every example of unauthorized trading or mis-marked tickets can be ascribed to time pressure and fatigue. Frequently, bad folks are simply up to no good. Similarly, some folks just won’t listen to reason and no matter how often you warn certain registered persons to avoid shortcuts and go by the book, they figure it’s their lucky day and who’s gonna know and who’s gonna find out — and that’s exactly when bad goes to worse.”

If you believe your stockbroker or investment advisor executed trades on your non-discretionary account without your permission, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

The feeder funds used by full-service brokerage firms to invest in Paulson’s Advantage and Advantage Plus Funds went by a variety of names, such as LionHedge Paulson, UBS Paulson Advantage Fund, Morgan Stanley HedgePremier Paulson, Paulson Advantage Access Fund and CAIS Paulson. Stock fraud lawyers say that all of the aforementioned funds invest in Paulson’s funds and that in some cases they may not have provided oversight or due diligence in the funds, despite representations made to investors.

Following the Advantage Fund’s decline, in May 2012 the fund was put on Morgan Stanley Wealth Management’s “watch list” and investors are now being advised to redeem. Three months later, Citigroup reportedly made a similar decision, pulling $410 million from Paulson’s funds. In light of the fact that the Paulson funds were sued by an investor in February 2012, many investors are contacting securities fraud attorneys about their losses. In the 2012 lawsuit, both Paulson & Co. and its funds were charged with deeply investing into SinoForest without conducting adequate due diligence and accused of breach of fiduciary duty.

If you invested in one of the Citigroup, Morgan Stanley, Merrill Lynch or UBS Financial Services feeder funds listed above, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

In recent events, other non-traded REITs have gone through this process and securities fraud attorneys say that, in most cases, the event does not go well for investors. As a result of the exit event, many REITs have experienced a significant decline in the offering — often amounting to 30 percent or more of the investment’s value.

As the seventh-largest non-traded REIT in the industry, Cole Credit Property Trust II has invested assets amounting to nearly $3.4 billion. Reportedly, Morgan Stanley and UBS Investment Bank have been hired by Cole Credit Property Trust II to explore their options for the exit event. Investment fraud lawyers encourage Cole Credit Property Trust II investors to closely monitor the REIT’s valuation as, despite an estimated valuation of $9.35 per share, the trend in previous non-traded REITs indicates that the market may not be so kind to the per share valuation.

In many cases, broker-dealers may have failed to adequately perform due diligence on non-traded REITs prior to recommending them for sale to their customers. Furthermore, many brokerage firms may have failed to adequately consider clients’ age, net worth, investment experience and risk tolerance before determining an investment’s suitability for each client. REITs typically carry a high commission which motivates brokers to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Non-traded REITs, such as Cole Credit Property Trust II, carry a relatively high dividend or high interest, making them attractive to investors. However, these investments are inherently risky and illiquid, which limits access of funds to investors.

If you suffered significant losses as a result of your investment in a non-traded REIT, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities fraud attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Securities arbitration lawyers say this situation is similar in some ways to what happened when, after Lehman declared bankruptcy, Series 2008A of Main Street Natural Gas Inc. Gas Project Revenue Bonds were downgraded. In the case of the Lehman bonds, the bonds were not guaranteed by Lehman Brothers, though certain payment obligations of the gas supplier were guaranteed.

The following is a list of gas prepayment bonds that have been affected by downgrades:

• Tennessee Energy Acquisition Corporation Gas Project Revenue Bonds, Series 2006A
• Public Energy Authority of Kentucky Inc. Variable Rate Gas Supply Revenue bonds, Series 2006A
• New Mexico Municipal Energy Acquisition Authority Gas Supply Variable Rate Revenue Bonds, Series 2009
• American Municipal Power Inc., OH Electricity Purchase Revenue Bonds, 2007A
• Lancaster Port Authority Gas Supply Variable Rate Revenue Bonds, Series 2008
• Salt Verde Financial Corporation, AZ Senior Gas Revenue Bonds, 2007
• Central Plains Energy Project Gas Project Variable Rate Revenue Bonds (Project No. 2), Series 2009
• Main Street Natural Gas Inc. Gas Project Variable Rate Revenue Bonds, Series 2010
• Texas Municipal Gas Acquisition & Supply Corporation II Gas Supply Revenue Bonds, Series 2007A & 2007B
• California Statewide Communities Development Authority Gas Supply Revenue Bonds, Series 2010
• Municipal Energy Acquisition Corp. Gas Revenue Bonds, Series 2006A & 2006B
• Indiana Bond Bank Gas Revenue Bonds, 2007
• Northern California Gas Authority No. 1 Gas Project Revenue Bonds, Series 2007A & 2007B
• Main Street Natural Gas Inc. Gas Project Revenue Bonds, Series 2006A & 2006B
• Roseville Natural Gas Financing Authority, CA Gas Prepayment Revenue Bonds, Series 2007A
• Public Authority for Colorado Energy Natural Gas Purchase Revenue Bonds, Series 2008
• Main Street Natural Gas Inc. Gas Project Revenue Bonds, Series 2007A
• Long Beach Bond Finance Authority Natural Gas Purchase Revenue Bonds, Series 2007A & 2007B
• Natural Gas Acquisition Corporation of the City of Clarksville, TN Gas Revenue Bonds, Series 2006
• Texas Municipal Gas Acquisition & Supply Corporation I, Gas Supply Revenue Bonds, Series 2006A & 2006B
• Texas Municipal Gas Acquisition & Supply Corporation I, Gas Supply Revenue Bonds, Series 2008D
• Black Belt Energy Gas District Gas Project Revenue Bonds, Series 2012A
• Central Plains Energy Project Gas Project Revenue Bonds (Project No. 3), Series 2012

According to stock fraud lawyers, the profitability and yield of investor holdings may be impacted by the downgrades placed on these investments. Furthermore, if the gas supplier guarantor’s credit risk was not disclosed, or if the bonds were recommended as “safe,” investors may be able to recover losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

According to investment fraud lawyers, many Fidelity investors have learned that their Facebook stock orders were not executed at previously expected prices. In addition, some Fidelity investors decided to cancel their Facebook stock orders prior to the time it began trading, on May 18 at 11:30 am, but the stock was allegedly assigned to their accounts anyway. Many investors were confronted with margin calls that were unexpected because of Fidelity’s failure to honor the canceled orders. Securities fraud attorneys say this exacerbated the situation.

In a related case, Facebook Inc., Morgan Stanley and other banks are being sued by Facebook’s shareholders. The shareholders claimed Facebook’s weakened growth forecasts were hidden by the defendants prior to its $16 billion IPO. According to the complaint filed in the U.S. District Court in Manhattan, changes in the business forecast during the IPO process were only “selectively disclosed by defendants to certain preferred investors.” The complaint alleges that “the value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result.” A similar lawsuit was filed by another investor in a California state court. In the first three days of trading, Facebook shares declined 18.4 percent, reducing the stock’s value by more than $2.9 billion.

If you sustained losses as a result of Fidelity’s alleged execution errors of Facebook stock, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

In connection with FINRA’s efforts, UBS Financial Services, Morgan Stanley, Wells Fargo and Citigroup Global Markets Inc. have agreed to pay $7.3 million in fines and $1.8 million in restitution, totaling $9.1 million. This will settle allegations that they sold inverse and leveraged ETFs to clients for which the investment was unsuitable. According to FINRA, these four firms did not have a “reasonable basis” for the recommendation of the securities to certain clients and also failed to provide adequate supervision. For more than a year, from January 2008 through June 2009, $27 billion in inverse ETFs were bought and sold by the firms.

With ETFs and ETNs now being recognized as a significant problem, we are likely to see more sanctions leveled by FINRA. According to stock fraud lawyers, the SEC ceased approving applications for ETFs in March 2010, when those ETFs used derivatives. Furthermore, the SEC indicated that it wanted to determine if leveraged and inverse ETFs warranted additional investor protection. There is concern, from both FINRA and the SEC, that inverse and leveraged ETFs are being confused with traditional, less risky ETFs.

According to securities fraud attorneys, the higher risk of leveraged and inverse ETFs is a result of the fact that they use leverage and compounding and they reset daily. Because of this, these investments’ performance can be significantly different from the underlying index’s performance.

If you suffered significant losses as a result of your investment in an inverse ETN or ETF that was unsuitable for you, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

McKee convinced an LPL client to invest $400,000. This investment took place in April 2007 and was put into a real estate venture. However, according to the FINRA complaint, McKee failed to notify or receive approval from LPL for the venture. Following a heart attack, which subjected the investor to significant medical expenses, she contacted McKee to have her money returned. McKee received two checks for $200,000 in February 2008 but failed to return the money to the investor. Instead, he told the client the funds remained invested and then used them for his own use. The money has not yet been returned to the client.

According to the police statement on the matter, McKee “committed aggravated theft by deception and fraud with respect to securities or securities business” from February 2008 to the present. According to Oregon officials, McKee sold unregistered securities, conducted unauthorized liquidation of investment account monies, concealed the liquidation and made an unauthorized deposit of said funds into his personal bank account.

According to the FINRA complaint, McKee used material misrepresentations and omissions to persuade investors to make investments in multiple undisclosed real estate ventures in which he had a direct or indirect financial interest. He is also accused of lying about how the invested funds would be used, improperly using customer funds for personal benefit and making unsuitable recommendations.

From November 2002 until September 2008, McKee was affiliated with LPL. Immediately following and until November 2010, he was associated with Berthel Fisher. At that point he joined Morgan Stanley until he was discharged in October.

If you believe you have been the victim of broker misconduct similar to McKee’s, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Underwriters named in the lawsuit include BNY Mellon Capital, Barclays, Citigroup, Merrill Lynch, Goldman Sachs, UBS and Morgan Stanley. Under Section 11 and Section 12(a)(2) of the Securities Act of 1933, underwriters of public offerings may be held liable if they fail to conduct a due diligence investigation of the information provided in prospectuses and registration statements.

The class action lawsuit states that, “The Underwriter Defendants underwrote BNY Mellon’s May 11, 2009 and/or June 3, 2010 common stock offering which were conducted pursuant to materially false and misleading offering materials and are charged with violations of the Securities Act in their capacity as underwriters for such offering.” Furthermore, allegations of the class action state that “throughout the Class Period, defendants concealed and failed to disclose material adverse facts about the Company’s financial well-being, business relationships, and prospects,” and goes on to claim that as a result of the wrongful acts and omissions of the defendants, combined with the “precipitous decline” of the common stocks’ market value that resulted from the disclosure of a FX trading scheme, investors suffered damages.

If you incurred losses as a result of BNY Mellon stocks related to this case, contact a stock fraud lawyer immediately to find out more about your legal rights and options. Contact The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The FHFA is seeking civil penalties as well as damages. Allegedly, the financial institutions violated fiduciary duty by providing misleading loan descriptions as a part of their sales and marketing materials. The marketing materials did not reveal the true risk factors associated with the loans. According to the FHFA’s press release, “Based on our review, FHFA alleges that the loans had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the Enterprises for those securities.”

Congress and regulators have put forth a continuing effort to deal with the practices of institutions that led to the financial crisis of 2008 and this lawsuit is part of that goal. It is similar to the one filed on July 27, 2011 against UBS Americas Inc. The Housing and Economic Recovery Act of 2008 gives the FHFA the authority to file complaints such as this one.

As conservator of Freddie Mac and Fannie Mae, the FHFA is responsible for preserving the assets of these companies, but if — as an individual investor — you have suffered investment losses that you believe to be the result of misleading marketing materials or a breach of fiduciary duty, find out more about your legal rights and options by contacting an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Markups refer to the difference between the lowest current offering price of an investment for the dealer and the actual price the dealer charges the customer. According to the Municipal Securities Rulemaking Board, or MSRB, “MSRB rules require that the price at which a broker-dealer sells a municipal security to a customer be fair and reasonable, taking into consideration all relevant factors.” Though the MSRB does not set numerical guidelines for what constitutes a “reasonable” markup, they do acknowledge that whether the total price paid by the customer can be considered “fair and reasonable” can be affected by the mark-up.

According to FINRA’s investigation, Morgan Stanley’s 5 percent to 13.8 percent markups and markdowns were higher than warranted when considering market conditions, value of services rendered to customers and the cost of executing the transactions. In addition, the supervisory system Morgan Stanley had in place for corporate and municipal bond markups and markdowns was found to be inadequate by FINRA. Inadequacies of the supervisory system included a failure to include markups and markdowns less than 5 percent — regardless of if they were excessive or not — and the firms’ policies and procedures.

“Firms must ensure that customers who buy and sell securities, including corporate and municipal bonds, receive fair and reasonable prices regardless of whether a markup or markdown is above or below 5 percent,” says According FINRA executive vice president of market regulation Thomas Gira. “Morgan Stanley clearly violated fair pricing standards and FINRA will continue to require firms that violate such standards to make their customers whole.”

Without admitting or denying the charges, Morgan Stanley consented to FINRA’s findings. If you have invested with a firm that you believe has charged excessive markups or markdowns, please bring it to the attention of an investment attorney at The Law Office of Christopher J. Gray by calling (866) 966-9598.

If you’ve lost money because of Mr. Haigney, you can contact us at InvestorLawyers.net for a free, confidential consultation. We may be able to help.

Kimura was previously barred from associating with any member of FINRA in 2009. Kimura worked with Morgan Stanley until May 2006 and then with Sun Life Financial Distributors until December 2007.

Kimura’s former wife’s mother, her grandmother, her sister, her father and her father’s company were all victims of his fraud. Kimura took money from his father-in-law’s Japan-based company without permission and subsequently lost around $360,000 trading its stock. He also forged signatures on 206 checks, stealing a total of $1.5 million through these forgeries.

This federal court decision did not involve any restitution to his in-laws because that situation had already been resolved. According to Morgan Stanley, Kimura’s fraud was not discovered until after his 2006 resignation. When his broker misconduct was discovered in 2007, an investigation was initiated by Morgan Stanley and, together with the authorities, they “amicably resolved this matter with Mr. Kimura’s wife’s family.” The Morgan Stanley spokesperson went on to say, “We are pleased that the court had ordered Mr. Kimura to make restitution to Morgan Stanley for his deplorable misconduct and that justice has been done in this case.”

Kimura, 42, pleaded guilty to the charges in April. In addition to the 57 months in prison, he will serve nine years probation. Of this case, IRS special agent in charge of the Pacific Northwest, Marcus Williams, said, “when a wayward broker embezzles money from unknowing victims, forges signatures on checks, and then cheats on his taxes, that broker can expect to be prosecuted and sent to prison.”

In late September 2009, Larry Feinblum, Jennifer Kim’s immediate supervisor at the Swaps Desk, was told by his supervisor that their net risk position in the Wipro account was too high at $20 million, and should not be increased. Regardless, by October 6 Winpro’s net aggregate risk had reached $50 million. Kim and Feinblum brought the risk position down again, but by November, it had increased once more to $30 million and the two devised a scheme in which they booked swaps that would reduce the net risk position, falsely verified them, and then canceled the swaps, returning the risk to its higher position. In this way, they were able to fool the firm’s risk assessment program into believing the account was within acceptable risk limitations.

On December 16, 2009, the misconduct of Kim and Feinblum was exposed when Feinblum admitted to his supervisor that in only one day he had lost $7 million. Furthermore, on December 17, he admitted that he, along with Kim, had hidden exceeded risk limits. As a result of this confession, Feinblum and Kim were subsequently terminated on January 4, 2010. Feinblum settled for $150,000 on May 31 for related claims.

Together with Feinblum, Kim committed broker misconduct in the form of these “fake” swap orders a minimum of 32 times between October and December 2009. As a result of this deception, Morgan Stanley lost around $24.5 million. Luis Aguilar, the SEC’s Commissioner, stated that Kim’s $25,000 settlement was “inadequate.”

According to the SEC’s report, Kim’s misconduct “violated Section 13(b)(5) of the Exchange Act, which prohibits persons from knowingly circumventing or knowingly failing to implement a system of internal accounting controls or knowingly falsifying any book, record, or account.” Neither Kim nor Feinblum admitted or denied any wrongdoing.