Repeat & Correct: Massachusetts Fines Morgan Stanley for Lack of Broker Oversight Case
October 30 2019 - 2:22PM
Dow Jones News
("Massachusetts Fines Morgan Stanley for Lack of Broker
Oversight Case," at 11:32 a.m. ET, incorrectly stated that Morgan
Stanley didn't investigate Justin Amaral's activities after a
customer's accountant filed a complaint and presented the actions
as allegations. The corrected version follows.)
By Dave Sebastian
The Massachusetts' state secretary ordered Morgan Stanley (MS)
to pay $382,500 for 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 said 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 said Morgan Stanley failed to supervise Mr.
Amaral's trading activity and didn't investigate his activities
until after a customer's accountant filed a complaint in April
2014.
According to the order, Morgan Stanley 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 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 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 14:07 ET (18:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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