Articles Posted in Morgan Stanley

Published on:

David Zeng was recently barred from working within the securities industry after he failed to respond to inquiries concerning over a dozen customer complaints about his investment activities.  These complaints alleged misrepresenting an investment, unauthorized stock trading, unsuitable investment advice and fraud.

investment fraud lawyers

 

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.

Published on:

According to one claim that was recently filed, Morgan Stanley advisors recommended that one couple invest all their money into bonds issued by Puerto Rico Sales Tax Financing Corp., Puerto Rico Public Finance Corp. and Puerto Rico Electric Power Authority, when a low-risk, safe, fixed-income portfolio would have been more suitable for the couple. The claim is seeking to recover $200,000 in damages. According to stock fraud lawyers, Puerto Rico Bonds and bond funds were unsuitable for many investors given their age, investment objectives and risk tolerance.

Morgan Stanley Customers Could Recover Losses for Unsuitable Puerto Rico Bond Sales
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:

Published on:

Investment fraud lawyers continue to investigate claims on behalf of individuals who suffered significant losses in Puerto Rican bonds after the value of these investments plummeted in 2013, causing many investors to suffer significant losses. In addition, securities arbitration lawyers are keeping an eye on recent news that indicates investors may be able to pursue their claims in continental Unites States venues, rather than in Puerto Rico, due to the shortage of FINRA arbitrators on the island.

Recent News Regarding Puerto Rican Bonds

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.

Published on:

Investment fraud lawyers are currently investigating claims on behalf of Wells Fargo customers who suffered significant losses in municipal auction-rate securities. On December 24th, a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered Wells Fargo Advisors to buy back $94 million in securities at face value because the adviser allegedly misrepresented the investments, which would have violated the firm’s obligation to fully disclose all the risks of a given investment when making recommendations.

Wells Fargo Ordered to Buy Back $94 Million in Auction-rate Securities

According to Investment News, the award is related to securities purchased since March 2008 by the now-deceased Robert B. Cohen, his family and Hudson News, Cohen’s affiliated business. Reportedly, Cohen’s family has accused Wells Fargo and one of its advisors of misleading and fraudulent statements regarding municipal auction-rate securities.

Reportedly, when the financial crisis struck and investors found these securities difficult to sell, a Wells Fargo advisor allegedly told the Cohens they could earn back their investment within months with relatively high rates of return. According to investment fraud lawyers, a case is still pending against Timothy P. Shannon, a Wells Fargo adviser based in New Jersey. The FINRA panel also denied Wells Fargo’s request to have the dispute expunged from Shannon’s regulatory records.

Published on:

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of investing in managed-futures funds offered by Morgan Stanley Smith Barney (MSSB). MSSB subsidiaries Merrill Lynch Alternative Investments LLC and Ceres Managed Futures also are being investigated, among others.

Unsuitable Sales of Managed-futures Funds

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.

Published on:

Securities fraud attorneys are currently investigating claims on behalf of customers of Morgan Stanley and other full-service brokerage firms regarding the sales of bonds and other securities. In some cases, full service brokerage firms may have failed to provide fair and reasonable prices or best execution in some customer transactions involving municipal bonds, corporate bonds, agency bonds or other securities.

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.

Published on:

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in exotic ETFs, or exchange-traded funds, sold by Morgan Stanley. Recently, Morgan Stanley was ordered to pay $100,000 for its alleged improper sales practices of exotic ETFs to investors. According to New Jersey state regulators, Morgan Stanley did not properly train its advisers, who then sold leveraged and inverse exchange-traded funds to seniors desiring additional income.

Reportedly, the improper sales took place from January 2007 until June 2009. The $100,000 payment includes $10,000 for investor education, $25,000 for investigative expenses of the state and $65,000 in civil penalties. Morgan Stanley has apparently already paid New Jersey investor restitution in the amount of $96,940. However,  investors who suffered significant losses in unsuitable ETFs can still file a securities arbitration claim to recover losses.

In 2012, Morgan Stanley settled FINRA allegations regarding the firm’s handling of exchange-traded funds by paying almost $2.4 million. Reportedly, Morgan Stanley did not have an adequate supervisory system or written procedures in place to ensure compliance with NASD and FINRA rules for inverse and leveraged ETFs from January 2008 until January 2010. Allegedly, Morgan Stanley used the same procedures for oversight of the non-traditional ETFs as they did for traditional ETFs. In addition, investment fraud lawyers say Morgan Stanley-registered representatives did not completely comprehend the non-traditional ETF investments because the firm did not properly train them.

Published on:

  Reportedly, 15 brokerage firms have been subpoenaed by the Commonwealth of  Massachusetts as part of an  investigation into sales of alternative investments to senior citizens.

15 Brokerage Firms Subpoenaed Over Alternative Investment Sales

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.

Published on:

Investment fraud lawyers are currently investigating claims on behalf of customers of Morgan Stanley and other full-service brokerage firms who were the victim of unauthorized trading or discretionary trading on a non-discretionary account without receiving prior written authorization.

145925895REIT_Investors_May_be_Unaware_They_Suffered_Significant_Losses

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.

Published on:

Securities fraud attorneys are currently investigating claims on behalf of investors with full-service brokerage firms who suffered significant losses as a result of their investment in Paulson & Co.’s Advantage and Advantage Plus hedge funds. Reportedly, the Advantage Fund’s value declined 51 percent in 2011 and 19 percent in 2012. According to Securities and Exchange Commission filings, many major brokerage firms including Citigroup, Morgan Stanley, Merrill Lynch and UBS Financial Services used proprietary “feeder” funds to invest in the Paulson funds.

Paulson Hedge Fund and Full-Service Brokerage Firm Feeder Fund Investors Could Recover Losses

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.

Contact Information