Lloyd Thomas Layton, a former registered stockbroker submitted a Letter of Acceptance, Waiver and Consent (AWC) by the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in an unsuitable pattern of short-term trading of unit investment trusts (UITs).
Layton was registered from June 2009 to March 2015 as a General Securities Representative of Morgan Stanley. According to FINRA, Layton repeatedly engaged in an unsuitable pattern of short-term trading of UITs in a total of 54 customer accounts. Mr. Layton allegedly recommended that these customers purchase then sell their UITs before their maturity date. In addition, Layton also recommended his customers to use the proceeds from a short term sell of a UIT and purchase another with similar or identical investment objectives. Due to Layton’s unsuitable recommendations, his customers incurred unnecessary charges.
Without admitting or denying FINRA’s findings, Mr. Layton was assessed a fine of $5,000 and suspended from association from any FINRA member for three months. The suspension is in effect from September 17, 2018 to December 16, 2018.
Brokers have an obligation to learn their client’s financial needs, objectives and circumstances before recommending an investment. Unsuitable recommendations occur when the broker recommends an investment inconsistent with the client’s age, financial situation, needs, circumstances or objectives. Investment in a particular type of security may be unsuitable, or the amount or frequency of transactions may be excessive and therefore unsuitable for a given customer. For example, it would be unsuitable if the client wanted safety of principal and the broker recommends a risky stock or option strategy.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from unsuitable recommendations, unsuitable trades and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Morgan Stanley, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Morgan Stanley account due to unsuitable recommendations and/or unsuitable short-term UIT trades by your broker? Was Lloyd Thomas Layton your stockbroker? 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 broker 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 40 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 firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.