FINRA Arbitrators Order Morgan Stanley and Former Advisor to Pay Damages to Mexican Farmer

Posted on June 15th, 2022 at 1:10 PM
FINRA Arbitrators Order Morgan Stanley and Former Advisor to Pay Damages to Mexican Farmer

From the Desk of Jim Eccleston at Eccleston Law:

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Morgan Stanley and a former advisor with the firm to each pay $160,000 in damages to a Mexican farmer for allegedly making improper recommendations. 

The Mexican farmer, Carlos Ramon Tapia Sanchez, sold his farming operation in 2015 before investing the proceeds in junk bonds pursuant to the recommendation of his financial advisor. However, the junk bonds allegedly were unsuitable as they fell outside of Sanchez’s risk tolerance. Sanchez, who is now 70, worked with Morgan Stanley advisor Francisco Javier Valenzuela and lost nearly $368,000 on the investments. Sanchez filed an arbitration claim against Morgan Stanley in 2020 alleging elder abuse, misrepresentation and failure to supervise. 

A three-person FINRA arbitration panel determined that Valenzuela was liable for misrepresentation and fraud. Additionally, the panel found Morgan Stanley liable for negligence and failure to supervise. According to the award, Morgan Stanley and Valenzuela jointly were ordered to pay Sanchez $160,000 in compensatory damages. 

According to BrokerCheck, Valenzuela departed Morgan Stanley in 2018 and received an industry bar from FINRA that same year. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston law, finra, morgan stanley

Return to Archive

TESTIMONIALS

Previous
Next

I want to extend a tremendous thank you for your dedication, professionalism, hard work and patient demeanor through this challenging time. It was enjoyable interacting with everyone on your team, this certainly helped while dealing with the situation and working towards resolution.

Dan M.

LATEST NEWS AND ARTICLES

June 14, 2024
Wells Fargo Fires Employees for Faking Work

Wells Fargo & Co. recently terminated over a dozen employees following an investigation into allegations of fake work activities.

June 13, 2024
FINRA Struggles to Revise Outside Business Rules

The Financial Industry Regulatory Authority’s (FINRA) attempt to update its rules on advisors’ outside business activities has stalled, according to Robert Colby, FINRA's chief legal officer.

June 12, 2024
Tax Court Denies Madoff Victims $8.2 Million Deduction

Victims of Bernie Madoff's Ponzi scheme, Christopher and Silvana Pascucci, cannot claim an $8.2 million tax deduction for their investment in life insurance premiums.