Morgan Stanley Ordered To Pay Over $300K In Fines And Restitution
Secretary of the Commonwealth of Massachusetts, William Galvin, is ordering Morgan Stanley (MS) to pay a $200K fine, as well as $182K in restitution to four customers who suffered losses while working with former broker Justin E. Amaral.
The ex-Morgan Stanley financial advisor was barred by the Financial Industry Regulatory Authority (FINRA) in 2015.
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is investigating customer complaints involving Amaral while he was a Morgan Stanley broker, as well as before that when he was registered with Citigroup.
The customers who are getting paid restitution in the Massachusetts regulator’s case have accused Amaral of churning. This typically involves engaging in the trading in a client’s account in a manner that contrary to the customer’s best interests and often for the purposes of generating commissions.
Morgan Stanley Accused Of Failure To Supervise
William Galvin’s office has concluded that not only did Morgan Stanley supervisors neglect to properly oversee Amaral’s trading activities but also they failed to prevent them from churning in some client accounts.
Also, Amaral’s former supervisors at the firm are accused of not adequately following up after receiving alerts noting that excessive trading was likely taking place in these accounts. It wasn’t until the accountant of one customer submitted a complaint in 2014, pointing out that Amaral had named himself the executor of that client’s account and a will beneficiary, that the brokerage firm began looking into the former broker’s activities. Morgan Stanley later fired him.
Amaral’s BrokerCheck record already shows five customer disputes that have been resolved or settled, with allegations ranging from unsuitable and excessive trading, misrepresentations to a breach of fiduciary duty.
The highest award to date was for over $1M in 2015 when a FINRA arbitration panel awarded a 92-year-old widow in her investor claim against Amaral and Morgan Stanley. The client accused the ex-Morgan Stanley broker of churning and reverse churning in her account, buying and selling closed-end funds in order to earn fees, and moving shares she had held since World War II so he could charge her more fees.
Broker Fraud Investor Claims
If you were a previous client of Justin Amaral or believe that you might be a victim of broker fraud misconduct with another firm, remember that it is not your fault. Our investment fraud lawyers at SSEK have over 100 years of experience in securities law. We have worked on multiple broker fraud cases and have successfully helped investors get their money back.
Contact our broker fraud lawyers today for a free, no-obligation case consultation so that we can help you determine whether you have grounds for an investor claim.