A former Morgan Stanley broker has been barred from association with any Finra-regulated broker-dealer following receipt of two unauthorized loans from clients worth several hundred thousand dollars, according to a Finra enforcement notice filed Sept. 30.
The broker, Jeffrey Hunter Smith, borrowed $300,000 from two clients — $150,000 from each — in December 2011 and August 2012, respectively, without first receiving prior written approval to enter into the loans from Morgan Stanley, according to a letter of acceptance, waiver and consent filed by the Financial Industry Regulatory Authority Inc.
Mr. Smith was registered with Morgan Stanley from 2009 to 2015, according to his Finra BrokerCheck report. He was most recently registered with Wells Fargo Advisors, until June of this year.
Morgan Stanley's written supervisory procedures prohibited brokers from entering into a borrowing arrangement with a firm client unless the client was an immediate family member, and the broker provided written notice of the arrangement prior to entering into the loan.
Neither client was a member of Mr. Smith's immediate family.
In addition to not disclosing the loans in subsequent annual sales questionnaires, Mr. Smith falsely attested he had not borrowed money from firm clients, according to the Finra document.
In violation of Finra rules, Mr. Smith, through his counsel, informed the broker-dealer watchdog that he would not be furnishing requested documents, such as personal bank account statements, as part of an investigation into his conduct.
Mr. Smith allegedly also failed to disclose a creditor compromise in a timely manner, according to Finra.
Mr. Smith's counsel, Henry Willett III of Christian & Barton, didn't immediately respond to a request for comment.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
