Former Morgan Stanley Advisor Banned for Profit-Sharing Scheme and Policy Violations

Posted on June 12th, 2025 at 3:41 PM
Former Morgan Stanley Advisor Banned for Profit-Sharing Scheme and Policy Violations

From the desk of Jim Eccleston at Eccleston Law

Joseph A. Eisler has agreed to a permanent ban from the brokerage industry, according to a recent settlement with the Financial Industry Regulatory Authority (“FINRA”).

The FINRA Acceptance, Waiver and Consent (“AWC”) detailed that Eisler, formerly with Morgan Stanley in New York, improperly allocated new issue shares to a customer more than 100 times. AdvisorHub reports that he allegedly received a portion of the profits from those sales - a clear violation of FINRA rules prohibiting such arrangements.

Additionally, the investigation revealed that from 2014 to 2022, the same customer paid Eisler over $120,000 in excessive fees on unrelated transactions. AdvisorHub reports that Eisler compounded his misconduct by using his personal phone to send hundreds of business-related messages, sidestepping firm policies on approved communication platforms.

Morgan Stanley initiated its internal review after filing a December 2022 termination notice with FINRA, noting Eisler’s voluntary resignation while on administrative leave. The firm cited allegations of unauthorized profit-sharing and the use of unapproved messaging applications to discuss confidential client trading activity.

Under FINRA Rule 5131, brokers may not offer or threaten to withhold allocations of new issue shares as inducement for compensation deemed excessive relative to services provided. Morgan Stanley, for its part, strictly prohibited brokers from sharing directly or indirectly in customer profits or entering any agreements involving new issue allocations.

By agreeing to the settlement, Eisler neither admitted nor denied FINRA’s findings but accepted the industry bar as part of the resolution.

 

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

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