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North Carolina Retiree Couple Files FINRA Arbitration Case Against Morgan Stanley Over Energy Investment

Two North Carolina investors have filed an arbitration claim with FINRA against Morgan Stanley (MS) over unsuitable investments involving the financial firm’s Cushing MLP High Income Exchange Traded Note. The married couple, who are retirees in their sixties, are accusing the brokerage firm of:

· Common law fraud

· Negligence

· Breach of fiduciary duty

· Negligent supervision

· Failure to adequately disclose the risks

In a phone interview with InvestmentNews, the claimants said that they have lost over $100K. According to the couple, a Morgan Stanley broker invested about $150,000 of their money in the Morgan Stanley Cushing MLP High Income ETN, which is an exchange traded note connected to master limited partnerships with shipping and energy assets. Their legal team said that the couple did not understand the extent of the risks involved in that they could potentially lose their principal. This was a loss they could not afford. Instead, the claimants were purportedly told that their investment would make them money.

The Cushing MLP High Income Exchange Traded Note seeks to give investors cash upon maturity or early repurchase, as well as variable coupon payments every quarter (depending on how the underlying index, performs). The claimants’ broker fraud lawyers believe that Morgan Stanley recommended the exchange traded note to investors who were seeking to make money but may not have understood or been fully apprised of all the risks.

It is a broker’s responsibility to tell a customer of the risks involved in any recommended investments. The broker and his/her firm must also make sure that their recommendation is suitable for the investor according to his/her net worth, age, investment goals, and portfolio.

Losing your investment can be tough. For seniors, who are no longer working, to lose their savings can be financially devastating. You want to speak with a senior investor fraud law firm to explore your legal options.

Contact Shepherd Smith Edwards and Kantas, LTD LLP to speak with one of our experienced ETN fraud attorneys.

Couple files Finra arbitration claim against Morgan Stanley in connection with energy investment, Investment News, March 8, 2016

Cushing MLP High Income Exchange Traded Note

Exchange-Traded Notes—Avoid Unpleasant Surprises, FINRA

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