Last week, a Financial Industry Regulatory Authority (FINRA) arbitration panel awarded $2.5 million to a group of physicians who alleged their Morgan Stanley & Co. Inc. (Morgan Stanley) investment advisor, in Jackson, Mississippi, committed unauthorized trades and falsified business returns due to Morgan Stanley's lack of supervision.
The three-member panel found Morgan Stanley and the branch manager were liable for both compensatory and punitive damages, as well as attorneys’ fees and costs, under federal and state law. The panel found the Morgan Stanley broker allegedly traded investors’ money fraudulently before the 2008 financial crisis.
The physicians filed their claims in June 2012, claiming their investment professional at Morgan Stanley had traded erratically without their authorization. The dispute was arbitrated over a period of six months. That the panel award attorney's fees and punitive damages likely speaks to the severity of investment professional's conduct and Morgan Stanley’s lack of supervision. Included in the award was about $1.5 million for compensatory damages, about $104,000 for punitive damages, $609,000 for attorneys’ fees and interest on the compensatory damages.
A spokeswoman for Morgan Stanley, said the company takes its responsibilities to its customers seriously and respectfully disagrees with the arbitrators’ decision.
The experienced securities litigation attorneys at Colling Gilbert Wright & Carter have litigated and resolved hundreds of FINRA arbitration claims. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation