Tag Archives: Morgan Stanley

Morgan Stanley pays $1 million U.S. SEC fine over stolen customer data

Morgan Stanley has agreed to pay a $1 million fine to settle U.S. Securities and Exchange Commission civil charges that security lapses at the Wall Street bank enabled a former financial adviser to tap into its computers and take client data home, the regulator said on Wednesday.

The settlement resolves allegations related to Galen Marsh’s unauthorized transfers from 2011 to 2014 of data from about 730,000 accounts to his home computer in New Jersey, some of which was hacked by third parties and offered for sale online.

Marsh was sentenced in December to three years probation and ordered to pay $600,000 in restitution after pleading guilty to one felony count of unauthorized access to a computer. Prosecutors had sought prison time.

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Morgan Stanley promotes exec who oversaw controversial sales contest that pushed risky loans on some of its wealthiest customers

Morgan Stanley has promoted an executive who oversaw a questionable sales contest that pushed risky loans on some of its wealthiest customers — even as a Wall Street watchdog is probing the Wall Street firm over the practice.

Lynn Sullivan, an executive director who oversaw a 2014 sales contest to promote the loans in the New England region, was named the head of cash management sales in Purchase, NY.

In March, The Post exclusively reported that the bank had been giving out financial incentives to brokers who sold the most securities-based loans, one of the firm’s biggest money-makers. Regulators look askance at incentivizing employees to sell a specific product.

Sullivan was one of the highest-ranking executives on an e-mail chain obtained by The Post that divided brokers into “teams” and detailed how the bank would pay out thousands of dollars through a pilot program.

The report spurred a probe by the Financial Industry Regulatory Authority into the bank’s loan sales practices.

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California AG Files Suit Against Morgan Stanley Over False Claims and Securities Violations

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PDF icon People of the State of CA v. Morgan Stanley.pdf 33.23 MB

SAN FRANCISCO – Attorney General Kamala D. Harris today filed a lawsuit against investment bank Morgan Stanley for misrepresentations about complex investments such as residential mortgage-backed securities, in which large pools of home loans were packaged together and sold to investors.  These misrepresentations contributed to the global financial crisis and to major losses by investors including California’s public pension funds, which are responsible for the retirement security of California peace officers, firefighters, teachers, and other public employees.

The complaint, filed in San Francisco Superior Court, alleges that Morgan Stanley violated the False Claims Act, the California Securities Law and other state laws by concealing or understating the risks of intricate investments involving large numbers of underlying loans or other assets. In addition to residential mortgage-backed securities, the complaint also focuses on “structured investment vehicle” investments, which involved not just packages of residential mortgage loans but also other types of debt of individuals and corporations.

“Morgan Stanley’s conduct in this case evidenced a culture of greed and deception that helped create a devastating economic crisis and crippled California’s budget,” said Attorney General Harris. “This lawsuit is necessary in order to hold Morgan Stanley accountable for the destruction it caused to California, our people, and our pension funds.”

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Morgan Stanley penalized for advisor fraud, ducks huge fine

Wealth advisors found guilty in FINRA arbitration after employee’s affair with client.

Morgan Stanley faces a $35 million charge after wealth advisors were found to have engaged in fraud and breached fiduciary duty to an elderly client, according to an arbitration panel appointed by the Financial Industry Regulatory Authority.

Lawyers for Lynnda Speer, widow of Home Shopping Network co-founder Roy Speer, said Florida Morgan Stanley wealth advisors Terry McCoy and Ami Forte were responsible for unauthorized trades on Roy Speer’s account. A FINRA panel on Monday determined that McCoy and Forte were guilty of elder exploitation, breach of fiduciary duty, constructive fraud, negligence and negligent supervision.

Lawyers for Speer’s widow alleged that Forte manipulated the account during a yearslong affair she had with Roy Speer, who died in 2012.

The FINRA panel found for damages of more than $32.8 million and costs of more than $1.5 million, in addition to legal fees in the case, which have yet to be determined.

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The Whistleblowers’ Weekly Lemons Award Goes to Dr. Ben Carson

lol! So true… And Ben Carson never answered the question from the moderator from the Presidential debate!

William K. Black
February 15, 2016     Bloomington, MN

The Bank Whistleblowers United announce an early winner of our second Financial Fraud Lemons of the Week award, and it relates to our inaugural winner, the Department of Justice (DOJ) for its lies about the latest humiliating settlement with Morgan Stanley.  If DOJ had actually prosecuted the elite Morgan Stanley bankers that led its mortgage fraud epidemic the new winner of our lemons award could not have said what he did about that settlement with a straight face.

Our second financial fraud lemons of the week award goes to Dr. Ben Carson, candidate for the Republican nomination for President in the latest GOP debate.  The Wall Street Journal’s Kimberly Strassel asked the following questions of Carson and received this wondrous response.

KIMBERLY STRASSEL:
10:13:14:00 Moving subjects. Dr. Carson. This week Morgan Stanley agreed to pay a $3.2 billion fine to state and federal authorities for contributing to the mortgage crisis. You have a lot of Democrats out saying that we should be jailing more executives. So two questions. Should financial executives be held legally responsible for financial crashes? And do you think fines like these are an effective way to deter companies from future behavior like that?
DR. BEN CARSON:
10:13:43:00 Well, first of all, please go to my website, BenCarson.com, and read my immigration policy. (LAUGHTER) Okay? Because it actually makes sense. Now, the– as– as far as these– fines are concerned, (CLAPPING) you know, here’s the big problem. We’ve got all these government regulators and all they’re doing is running around looking for people to fine. And we’ve got 645 different federal agencies and sub-agencies. Way, way too many. And they don’t have anything else to do.

10:14:14:00 I think what we really need to do is start trimming the regulatory agencies rather than going after the people who are trying to in– (CLAPPING) increase the viability, economic viability, of our society. Now, that doesn’t mean that there aren’t some people out there who are doing bad things.

10:14:33:00 But I’m not sure that the way to solve that problem is by increasing all the regulatory burden. You know, when you consider how much regulations cost us each year, you know, $2 trillion per family. $24,000 for a family. That happens to be the same level as the poverty level (BEEPING) for a family of four. You wanna get rid of poverty? Get rid of all the regulations. (APPLAUSE)

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CBS moderator asked Ben Carson at the Presidential debate if he believes that more financial executives should be held legally “responsible for crises”

International Business Times:

Later, neurosurgeon Ben Carson received a question more likely to come up in a Democratic presidential debate. CBS refererred to Morgan Stanley’s $3.2 billion settlement with state and federal regulators over the sale of mortgage-backed bonds in the lead up to the financial meltdown, and asked Carson if he believes that more financial executives should be held legally “responsible for crises” and if fines are an effective deterrent against bad behavior.

Though white-collar prosecutions have hit a 20-year low, Carson fired back that the real problem is that regulators are too aggressive.

“We have all these government regulators. All they’re doing is running around looking for people to fine, and we’ve got 645 different federal agencies and sub-agencies — way, way too many, and they don’t have anything else to do,” he said. “I think what we really need to do is start trimming the regulatory agencies, rather than going after the people who are trying to increase the economic viability of our society.”

Carson continued: “Now that doesn’t mean that there aren’t some people out there who are doing bad things. But I’m not sure that the way to solve that problem is by increasing all the regulatory burden. When you consider how much regulations cost us each year, $2 trillion. Per family, $24,000 per family. That happens to be the same level as the poverty level for a family of four. You want to get rid of poverty, get rid of all the regulations.”

The Inaugural Financial Fraud Lemons of the Week Award Goes to DOJ

fail1

And I concur!

William K. Black
February 12, 2016     Bloomington, MN

The Bank Whistleblowers United announce the inaugural Financial Fraud Lemons of the Week award.  There can be no more fitting recipient than the ironically named Department of Justice (DOJ).  The “lemon” is used in the economics and criminology literature to refer to a car of surpassingly terrible quality.  The quality is so bad that the car can only be sold through fraud.  We will award it each week to an example of dishonesty or cowardice about financial fraud that is worthy of public ridicule.  We want to leave room in our scale for truly spectacular examples, so this first award will only receive Four Lemons.  The first award is for what has become a routine example of dishonesty and cowardice by DOJ.  Its conduct should be a scandal of national proportions, but by now everyone expects DOJ to embarrass our Nation when it deals with elite bankers.

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