New York, NY — October 14, 2016 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has opened an investigation into potential Financial Industry Regulatory Authority (FINRA) sales practice violations by Morgan Stanley and its financial advisors after Morgan Stanley (NYSE:MS) was recently charged with “dishonest and unethical conduct” by the State of Massachusetts Securities Division, as reported by Reuters. According to the Massachusetts Securities Division Complaint, Morgan Stanley was “running unethical sales contests to cross sell banking business to brokerage customers.”
K&T founder, Lawrence L. Klayman, Esq. comments, “Our investigation focuses on whether Morgan Stanley used high pressure sales tactics motivated solely by paid incentives and not the customer’s best interests.” According to Massachusetts regulators, Morgan Stanley sponsored sales contests for opening Portfolio Account Loans that offered the following bonuses to employees; “$1,000.00 for 10 loans; $3,000.00 for 20 loans; and $5,000.00 for 30 loans.” Mr. Klayman explains, “Morgan Stanley provided employee training to ‘overcome objections’ that customers might have about opening a loan account. This training is inconsistent with the fiduciary duties Morgan Stanley owes its customers, instead customers should be warned about the risks of leverage.”
The sole purpose of this release is to investigate the sales practices of Morgan Stanley in connection with solicitations for portfolio loan accounts, which may include; margin abuse, unsuitable recommendations, breach of fiduciary duty, misrepresentations and omissions of material facts and a failure to supervise. Investors who have information about the sales practices of Morgan Stanley and their financial advisors are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.