Three Morgan Stanley Advisors Clear Records of Back-Office Mistake

Posted on April 11th, 2022 at 1:08 PM
Three Morgan Stanley Advisors Clear Records of Back-Office Mistake

From the Desk of Jim Eccleston at Eccleston Law:

A Financial Industry Regulatory Authority (FINRA) arbitration panel has expunged the records of three advisors who are part of a large Morgan Stanley team. The disclosure had related to their purported liability for a customer complaint pertaining to a back-office mistake over a misvalued stock certificate.


According to the FINRA panel, the advisors were “not responsible” for the mistake that occurred in Morgan Stanley’s back-office. The panel reasoned that the complaint ought to be removed because it was “factually impossible or clearly erroneous”, according to the award. The claim was filed in June 2021, which was six months after Sean’s team departed UBS for Morgan Stanley.


According to the award, customers had initially discovered old paper stock certificates and sought to have them valued and deposited at Morgan Stanley. However, Morgan Stanley’s back-office “mistakenly valued” the certificates at more than $1 million and subsequently sold them. The certificates eventually were deemed “worthless”, which prompted Morgan Stanley to reverse the sale and ensure their customers were “made whole”, according to the award. Nevertheless, the customers filed a lawsuit against Morgan Stanley and the advisors, but the customers later settled with the firm for “a nominal sum” of $20,000 in a settlement that did not involve the advisors, according to BrokerCheck.


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 am so blessed to have you and your dynamic team defending me. Your ethics, forward thinking and strategies are amazing.  You guys are the best group of attorneys in the country that I could hire to handle this complicated case.

Cindy C.

LATEST NEWS AND ARTICLES

February 10, 2026
Merrill Lynch Expands Client Disclosures on Crypto and AI Risks

Merrill Lynch updated its required client disclosure brochure to address, for the first time, the evolving risks tied to cryptocurrency-linked investments and the firm’s expanding use of Artificial Intelligence tools.

February 9, 2026
FINRA Orders Osaic Unit to Pay Over $5 Million for Misleading Bank Deposit Program Disclosures

The Financial Regulatory Authority (FINRA) ordered independent broker-dealer Osaic and its acquired firm, American Portfolios Financial Services, to pay more than $5 million after finding that American Portfolios misled customers about how it calculated fees in its bank deposit program.

February 6, 2026
Delaware Regulators Fine Kovack Advisors $985,000

Kovack Advisors Inc., the registered investment adviser affiliate of independent broker-dealer Kovack Securities Inc., agreed to pay a $985,000 fine to Delaware securities regulators.