Investment Loss Law Firm

Institutional Investors File 7-Figure FINRA Lawsuit Morgan Stanley Alleging Broker Fraud

Claimants Are Seeking Up To $5,000,000 In Damages

The Shepherd Smith Edwards and Kantas Investment Loss Law Firm ( recently filed an institutional investor claim against Morgan Stanley Smith Barney (DBA as Morgan Stanley Private Wealth Management) over losses sustained because of alleged gross negligence, fraudulent actions, and breach of fiduciary duty by the firm and Morgan Stanley broker Brian Pfeifler.

We believe this is a case of shocking abuse and misbehavior by Pfeifler, who is not a respondent in the lawsuit but whose alleged stockbroker misconduct was part of the problem. The claimants are a foundation/non-profit and an investment entity for a family, and they are both run by a novice investor who trusted this Morgan Stanley broker to give them prudent investing advice. Instead, the broker-dealer recommended huge concentrations into high fee, high-risk, complex alternative investments that were totally inappropriate given that these investors were not needing to take huge financial risks.

A few of the investments that were involved: 

  • Cantillon Global Equity
  • Tiger Global Private Investment Partners XV LP
  • Coatue Growth V
  • Select Equity Fund

Now, these two institutional investors have gone on to lose millions of dollars. Also, because of the nature of these alternative investments, the claimants were unable to close out positions to stop further losses.

In their FINRA lawsuit, our clients also are alleging breach of contract, misrepresentations and omissions, unjust enrichment through profits, mark-ups, mark-downs, commissions, fees, and spreads, and Morgan Stanley’s purported failure to properly supervise its registered representative and the accounts of its customers.

Alternative Investments Are Not For Every Investor

According to Morgan Stanley, alternative investments are speculative, risky investments and suitable for experienced investors that are able and willing to “forego liquidity and put capital at risk for an indefinite period.” They are illiquid, unregulated investments known to “engage in leverage and other speculative practices” that can up the chance of loss as well as volatility. Clearly, this broker-dealer was very aware of the high-risk nature of these investments and that they were likely unsuitable for these clients.

Alternative investments pay high commissions and fees to brokers, which also can cost investors significantly. If you sustained losses while working with a Morgan Stanley financial advisor, you want to work with skilled broker misconduct attorneys who have the resources, experience, and dedication to fight for your financial recovery. Keep in mind that broker-dealers tend to have their own legal team on retainer to fight against fraud claims, which is just one more reason you need savvy securities lawyers representing you.

Institutional investor loss claims can be complex. Also, not all institutional investors are experienced investors.

Shepherd Smith Edwards and Kantas represent institutional investors against the largest broker-dealers in the US. We work with foundations, nonprofits, charitable organizations, pension funds, endowment funds, municipalities, commercial trusts, retirement plans, corporations, private equity investors, and many others. Over the years, we have collectively recovered many millions of dollars for thousands of investors.

How To Schedule Your Case Assessment With Our Institutional Investment Loss Law Firm: 

If you are an institutional investor who has suffered losses that you suspect may be due to broker fraud or negligence, contact us today or call (800) 259-9010.


Contact Information