A National Association of Securities Dealers arbitration panel ordered Morgan Stanley (MWD) to pay investor Joacy Silva $452,034 for alleged breach of fiduciary duty and allegedly failing to supervise one of its employees. In a press release Thursday, a law firm representing Silva said the self-regulating brokers’ guild charged Morgan Stanley for the amount of Silva’s money lost by Rick Schoen, an employee in Morgan Stanley’s Beverly Hills, Calif. office, plus attorney’s fees.
The law firm said Schoen made trades without contacting Silva while she was out of the country for 29 months. The firm also said Morgan Stanley concentrated her portfolio in “unsuitable” and “speculative” technology and telecommunications stocks on margin.
The finding represents a finding of 100% responsibility on the part of Morgan Stanley.
Neither Morgan Stanley nor the NASD were immediately available for comment.
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees U.S. broker-dealers to protect investors and ensure market integrity. Established in 2007, FINRA was formed by merging the National Association of Securities Dealers (NASD) and the regulation, enforcement, and arbitration functions of the New York Stock Exchange (NYSE). Its primary responsibilities include writing and enforcing rules governing the activities of its member firms, conducting regular examinations to ensure compliance, and providing a dispute resolution forum for investors and broker-dealers.
FINRA also focuses on investor education, offering resources to help individuals make informed investment decisions and recognize potential fraud. One of its key tools is BrokerCheck, a public database providing detailed information about brokers and brokerage firms, including professional backgrounds and disciplinary histories. By maintaining stringent regulatory standards and emphasizing investor protection, FINRA plays a crucial role in fostering trust and stability in the U.S. securities markets.