Debra J. Ferrara, a non-registered associate employed by New York NY-based Morgan Stanley Smith Barney (Morgan Stanley), submitted a letter of Acceptance, Waiver, and Consent (AWC) in which she consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that she falsely represented that she had verbally confirmed five wire transfers totaling $108,680 which turned out to be fraudulent requests from a customer’s hacked email account.
Debra Jean Ferrara, of Old Bridge, New Jersey, allegedly caused five fraudulent wire disbursements to be transferred from a customer’s account to a third-party bank. According to FINRA, Ms. Ferrara, a client services associate with Morgan Stanley, was sent an email with a request for a wire transfer of $27,750 from the hacked account of a client to a third party account. Ms. Ferrara completed the wire processing form stating falsely that she had verbally confirmed the transfer request when she had not. FINRA found that two days following the first hacked account wire request, Ms. Ferrara received another email from the imposter from an email that looked similar, but was different. The “m” in the email address had been changed to an “n” this time. Again, Ms. Ferrara processed the wire transfer requests, falsely attesting to verbally confirming the request when she had not.
One week later, FINRA stated that the hacker sent another email to Ms. Ferrara with requests for two more wire transfers to third party accounts. The next day, the hacker sent another email noting a need for the “return of the yesterday wire of $23,000” and a request to wire funds to a different third party account. Once again, Ms. Ferrara did not contact the authorized account representative, falsified the forms to indicate that she had, and submitted the forms to be processed. When the wire did not go through due to an incorrect account number, the Morgan Stanley financial advisor and Ms. Ferrara finally contacted the true client and discovered that the five wire transfer requests were fraudulent.
FINRA assessed a deferred fine of $5,000 and suspended Ms. Ferrara from association with any FINRA member in any capacity for 60 days. The suspension was in effect from October 17, 2016 through December 15, 2016.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment account losses which stem from their employees’ negligence and/or misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise its representatives can bring forth claims to recover damages against firms, like Morgan Stanley, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Morgan Stanley account due to stockbroker or representative’s negligence and/or misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Morgan Stanley stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.