Kim Dee Isaacson, a former registered representative with Morgan Stanley, submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he consented to, but did not admit to or deny, FINRA’s findings that he knowingly misrepresented his customer’s account value by more than $3.1 million and willfully executed trades in his customer’s accounts despite express orders not to do so.
During the relevant period, Kim Dee Isaacson, of Farmington, Utah, earned nearly $400,000 in commissions and fees from his customer’s accounts, which were valued at approximately $27 million. Although Mr. Isaacson and his client spoke on the phone nearly every day regarding the accounts’ performance, Mr. Isaacson began providing false and inflated account values to hide the accounts’ losses. According to FINRA, Mr. Isaacson’s customer believed his accounts held $3.1 million more than their actual value because of his misrepresented account valuations. Further, FINRA found that Mr. Isaacson continued to purchase securities and long-term bonds despite his customer’s instructions not to do so. FINRA also found that Mr. Isaacson engaged in unauthorized trading in the accounts, effecting approximately 360 transactions without consent. Consequently, Kim Dee Isaacson was permanently barred from association with any FINRA member in any capacity.
Registered representatives, stockbrokers, and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior which violate industry rules and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require broker-dealers to establish and implement an appropriate supervisory system. The implementation of these rules requires supervisors to monitor 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/or their supervisors fail to establish and implement these protective supervisory measures, they may be held liable to investment account holders for losses flowing from the misconduct. As a result, investment account holders who have suffered losses stemming from a stockbroker or registered representative’s fraudulent and/or unlawful misconduct can bring forth claims to recover damages against broker-dealers like Morgan Stanley, which have a duty to supervise its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Morgan Stanley investment account due to your registered representative or stockbroker’s misrepresentations, omissions, or unauthorized trades? 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 financial professionals for misrepresentations, omissions and/or other unauthorized and prohibited conduct.
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 post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.