Daniel Todd Levine, a former Morgan Stanley (MS) broker, has been barred by the Financial Industry Regulatory Authority after he failed to cooperate in a probe into allegations that he may have taken part in outside business activities that he did not disclose to the broker-dealer while he worked for the firm. Levine was a Morgan Stanley broker based in Denver, Colorado between 2013 and July 2018 when he stepped down. His next employer was First Financial Equity Corp., but that brokerage firm fired him a few weeks later after he did not notify them about the FINRA investigation.
According to Levine’s BrokerCheck record, he previously worked with Prudential Securities, Merrill Lynch, and UBS (UBS). He was employed in the securities industry for over 20 years.
A number of other former Morgan Stanley brokers have recently made news headlines over allegations of broker fraud. Last month, FINRA announced that it had filed a lawsuit against Ami Forte, who is accused of making unauthorized trades in the account of now deceased Home Shopping Network co-founder Roy M. Speer. In November, former Morgan Stanley financial adviser James Polese was sentenced to five years behind bars after pleading guilty to defrauding customers of over $1M.
Morgan Stanley Keeps Paying After Former Broker Allegedly Bilked Pro Athletes
A few months ago, ex-Morgan Stanley broker Aaron Parthemer, also a FINRA-barred representative, was named in investor fraud claims brought by ex-NFL player Louis Delmas and former NBA player Udonis Haslem for having allegedly bilked the two athletes.
Now, a FINRA arbitration panel is ordering Morgan Stanley Smith Barney LLC to pay retired NFL player Asante Samuel and Mega Millions lottery winner James Grove $879K and $3.3M, respectively, in separate claims but once again involving Parthemer.
The panel said that Morgan Stanley didn’t properly supervise its ex-broker and found the broker-dealer liable for negligent supervision, negligence, and violating FINRA rules. Already, Morgan Stanley has had to pay ex-NBA player Keyon Dooling over $603K and former NFL player John St. Clair $206K related to Parthemer’s alleged misconduct.
FINRA Fines Morgan Stanley $10M For Anti-Money Laundering Detection Issues
In Late December, Morgan Stanley was fined $10M by FINRA after finding that there were issues with and supervisory failures related to its anti-money laundering detection program and that these purported problems had gone on for over five years. According to the self-regulatory authority (SRO)’s news release, the firm’s AML program didn’t fulfill certain requirements of the Bank Secrecy Act due to “shortcomings” that led to specific deficiencies.
The firm is accused of not setting up and maintaining a supervisory system designed in a matter reasonable enough to comply with the Securities Act of 1933’s Section 5, which prohibits unregistered securities sales and offerings. These purported lapses prevented the firm from being able to reasonably examine penny stock transactions made by customers for “red flags” warning of possible violations of Section 5.
Morgan Stanley also is accused of not putting into place procedures, policies, and controls to make sure that risk-based reviews were periodically performed on correspondent accounts that it kept for foreign financial institutions.
Inadequate Supervision and Broker Fraud
While a firm may not necessarily have been involved in a broker fraud, inadequate supervision, poor detection, and deficient prevention systems can make it easier for incidents of investor fraud to occur. At Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm), we have gone up against hundreds of financial firms in pursuing investor claims for losses involving broker fraud and investment adviser fraud. Contact our Morgan Stanley broker fraud attorneys today.
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