Mathew M. Serth, of Stone Ridge, Virginia, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly placing unauthorized trades in customers’ accounts without their knowledge or consent.
FINRA investigators found that while registered with Morgan Stanley, Mr. Serth entered trade orders in four accounts. The net costs of the transactions ranged from $15,000 to $86,000. However, FINRA stated that none of these customers granted Mr. Serth discretionary trading authorization to trade in their accounts. Upon discovering the unauthorized trades, Mr. Serth’s member firm cancelled the trades and reimbursed a customer for margin interest incurred as a result of the unauthorized trades. Without admitting or denying FINRA’s findings, Mr. Serth was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for three months. The suspension is in effect from August 7, 2017 through November 6, 2017.
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 losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the transactions of 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 unauthorized trading in your account? 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.