FINRA Fines Morgan Stanley And Scottrade For Failing to Detect Fraudulent Wire Transfer

Posted on July 24th, 2015 at 4:08 PM
FINRA Fines Morgan Stanley And Scottrade For Failing to Detect Fraudulent Wire Transfer

From the Desk of Jim Eccleston at Eccleston Law LLC:

Morgan Stanley and Scottrade Inc. agreed to pay $950,000 to FINRA after the regulatory authority deemed that the two firms failed to monitor wire transfers of customer funds to third-party accounts.

FINRA discovered that, from 2008 to 2013, three registered Morgan Stanley reps created fraudulent wire transfer orders and branch checks from customer accounts to third-party accounts. In some instances, these third-party accounts were the representatives’ own personal bank accounts. In total, $494,000 was transferred—affecting thirteen customers. FINRA asserts that Morgan Stanley did not have adequate supervisory systems and procedures to monitor the transfer in funds. These poor supervisory systems, in turn, allowed the transfers to go undetected, per FINRA.

FINRA also found that Scottrade failed to obtain proper customer confirmations for wires to third-party accounts. From 2011 to 2013, FINRA alleges that Scottrade did not obtain proper confirmations for third-party wire transfers of less than $200,000, and Scottrade did not have the correct personnel obtaining confirmations for wire transfers totaling up to $500,000. During the two year period, Scottrade processed over $880 million in third-party wire transfers. Once again, FINRA points to a poor supervisory system as allowing these actions to go undetected.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: Eccleston Law LLC, James Eccleston, eccleston, Eccleston Law, morgan stanley, scottrade inc.,

Return to Archive

TESTIMONIALS

Previous
Next

Hiring Eccleston Law has been one of the best career decisions I have made and this "investment" to maintain my sterling regulatory record has been returned many times over.  If you are in a situation where you've been unfairly accused, don't hesitate to talk with Eccleston Law. They are the best.

Thomas C.

LATEST NEWS AND ARTICLES

October 27, 2021
Former LPL Advisor Suspended For Completing 22 Trades Absent Client Consent

The Financial Industry Regulatory Authority (FINRA) has suspended and fined a former LPL advisor who allegedly completed 22 trades on behalf of a client without obtaining written consent. FINRA has issued a $5,000 fine and has suspended Michael Hartlett for 10 days.

October 26, 2021
Former Advisor Fails To Reverse Bar After Alleged $1 Million Theft From RBC

A former RBC Wealth Management advisor lost his bid to reverse an industry bar, according to an appellate decision issued by the Financial Industry Regulatory Authority (FINRA).

October 25, 2021
Firms Walk Thin Regulatory Line In Referring Self-Directed Clients To Advisors

While online trading platforms have surged in popularity during the pandemic, brokerage firms view self-directed investors as a source of new clients.