Misconduct Accusations Against Ex-Morgan Stanley Brokers
Broker Misconduct Case #1: John Tillotson
The Financial Industry Regulatory Authority (FINRA) has suspended ex-Morgan Stanley broker, John Tillotson, for 15 days and ordered him to pay a $5K fine after finding that he impersonated five clients during phone calls to a mutual fund company. This was so he could move their retirement money to the firm.
The Morgan Stanley brokerage firm fired Tillotson earlier this year over concerns that he may have “inappropriately” obtained information for “executed retirement plan transfer documents.”
According to the self-regulatory organization’s (SROs) letter of acceptance, waiver, and consent, Tillotson’s clients signed documents authorizing the move of their IRA accounts to a Morgan Stanley provided 401(k) plan. They also agreed for him to reach out to the mutual fund company about any more information required to fill the transfers. However, they didn’t tell him he could pretend to be them.
With 34 years in the industry, Tillotson was also previously a registered broker with Citigroup, Lehman Brothers, and EF Hutton & Co.
Ex-Morgan Stanley Broker Now Facing Civil And Criminal Fraud Charges
Broker Misconduct Case #2: Elias Haffen
Another former Morgan Stanley broker also in trouble with regulators is Elias Haffen, whom FINRA barred last year. Earlier this month, the US Securities and Exchange Commission (SEC) announced civil charges against him, accusing the former broker, who was fired by Wells Fargo last year, of defrauding retail clients of $1.6M.
Haffen allegedly promised them a 6% yearly return. Instead, he used their money to fund his lavish lifestyle. With nearly four decades working in the industry, he was also previously a registered broker with Bear Stearns & Co., Batemen Eichler, Hill Richards, Consolidated Capital Securities, Sutro & Co., and Merrill Lynch Penner and Smith.
After leaving Morgan Stanley brokerage firm, he became a Wells Fargo broker. Wells Fargo fired him over allegations that he made financial arrangements that the firm had never approved with clients.
Haffen’s troubles, however, aren’t just civil in nature. They are also criminal. He recently pleaded guilty to investment advisor fraud over criminal charges accusing him of bilking clients of hundreds of thousands of dollars.
Prosecutors claim that Haffen told investors they stood to make substantial returns in a “special” fund. Instead, he continued to swindle money from at least 11 clients in order to further fuel the expenses of his lavish lifestyle.
SEC Bars Former Morgan Stanley Broker Over Fraud Involving Castleberry Financial
Broker Misconduct Case #3: Scott Strochack
Another ex-Morgan Stanley broker who was also recently barred by regulators – this time by the SEC – is Scott Strochack. With fifteen years in the industry, he was registered with the firm from 2009 to 2015.
Previous to that, he had been a broker for Merrill Lynch, Neuberger Berman, Suntrust Equitable Securities, Integrated Resources Equity, and WH Neubold’s Sons & Co.
The SEC’s case stems from the alleged $3.8M broker fraud that harmed 17 investors, which purportedly occurred after Strochack left the firm and while he was the unregistered sales head of Castleberry Financial Services Group.
Scott Strochack pleaded guilty in the criminal case to the fraud charges that were brought against him.
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) works with investors that have suffered losses due to broker fraud or negligence.
Regardless of whether or not your broker has been charged in criminal and/or civil court if you believe that you may be the victim of broker fraud or brokerage firm negligence by a Morgan Stanley broker, contact SSEK Law Firm right away so that we can help you explore your legal options.