An investor who is retired and suffering from health issues is seeking $1M from Morgan Stanley (MS). The investor, a former inventor, claims that the broker-dealer did not properly supervise the financial adviser who handled his multi-million dollar account. He filed a Financial Industry Regulatory Authority claim and is accusing the firm of breach of fiduciary, negligence, unauthorized trading, excessive trading, fraudulent inducement, and significant tax liability.
The investor believes that over-concentation in risky sectors and over trading in too many individual stocks occurred, causing significant damage to his retirement funds. Among the investments that were involved were oil and gas investments, including Master Limited Partnerships. The claimant claims that Morgan Stanley hid the risks involved, even as the financial adviser engaged in a purportedly deceptive investment strategy. The result was that the investor’s account became heavily concentrated in risky investments.
The alleged broker negligence also purportedly caused tax consequences for the investor while benefiting Morgan Stanley with transactions costs of over $1M. The unsuitable taxable gains that were created by led to investment losses for the investor, even as the broker claimed that the investor’s account was profiting.
The claimant is seeking not just compensatory damages but also punitive damages.
Our broker fraud law firm represents individual investors, including retirees and senior investors that sustained losses due to the negligence of financial representatives and/or their firms. Financial advisers are required to properly disclose any investments risks involved to an investor while making sure that all investments are suitable and the risks manageable for the investor’s portfolio. Broker-dealers are responsible for adequately supervising their representatives to ensure that negligence doesn’t occur.
For many retirees that are no longer bringing in an income, sustaining investment losses can lead to financially catastrophic consequences. Contact our senior investor fraud lawyers today. Your initial case consultation with Shepherd Smith Edwards and Kantas, LTD LLP is a free, no obligation session.
Financial Industry Regulatory Authority
For Seniors, SEC