Massachusetts Fines Morgan Stanley for Lack of Broker Oversight Case
October 30 2019 - 12:02PM
Dow Jones News
By Dave Sebastian
The Massachusetts' state secretary ordered Morgan Stanley (MS)
to pay $382,500 for allegedly 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 claimed 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 alleged Morgan Stanley failed to supervise
Mr. Amaral's trading activity, and didn't investigate his
activities after a customer's accountant filed a complaint in April
2014.
According to the order, Morgan Stanley allegedly 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
allegedly 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 Inc. has barred Mr.
Amaral from acting as a broker. Attempts to reach Mr. Amaral
weren't immediately successful.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
October 30, 2019 11:47 ET (15:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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