Erez Law represents several investors that have filed claims against Morgan Stanley Financial Advisor Angel Edgardo Aquino-Velez (CRD #2687333). His former customers allege that he was dangerously concentrating their investment portfolio in high risk and unsuitable Puerto Rico bonds. The Miami, Florida broker has been registered with Morgan Stanley from 2010 to present.
Erez Law recently filed FINRA arbitration claims on behalf of two of Aquino’s former clients.
One Erez Law client alleges that she has incurred damages of $3 million as a result of Morgan Stanley’s fraud and other wrongful conduct. In addition to the losses to her personal accounts, the Morgan Stanley former customer alleges that she suffered losses in Puerto Rico Bonds in an account maintained by her business. Aquino and Morgan Stanley advised the Erez Law client to invest more than 70% of her portfolio in three high risk Puerto Rico bonds that were issued by the Puerto Rico Sales Tax Financing Corp. (“COFINA), Puerto Rico Aqueduct and Sewer Authority (PRASA) and Puerto Rico Government Development Bank (GDB). The client alleges that Aquino and Morgan Stanley made misrepresentations and material omissions verbally and in writing that the interest payments from the Puerto Rico bond at issue in this case were federal tax exempt. In reality, the bonds are only be tax exempt for Puerto Rico residents, not for residents of Florida like the former Morgan Stanley investor. The case is pending.
A former Morgan Stanley customer alleges that Aquino’s reckless investment strategy caused them to lose between $500,000 and $1 million of irreplaceable retirement savings. Aquino represented that the investments were safe and tax free. He recommended the the former Morgan Stanley customer recklessly over concentrated $600,000 of the trust’s $1.3 million portfolio in a single high-risk Puerto Rico bond issued by the Puerto Rico Public Finance Corp. The investor alleges that Aquino and Morgan Stanley made misrepresentations and material omissions verbally and in writing that the interest payments from the Puerto Rico bond at issue in this case were federal tax exempt. In reality, the bonds are only be tax exempt for Puerto Rico residents, not for residents of Florida like the former Morgan Stanley investor. The case is pending.
The Puerto Rico Public Finance Corp. had the poorest credit quality among most Puerto Rico bonds at the time of investment. These bonds were purchased at $100 and are now worth just $6.75, losing 93% of their initial par value. These cases at hand violate Morgan Stanley’s own rule to diversify investments to construct a stable investment portfolio.
It is alleged that Angel Aquino recommended that his customers invest in the following bonds:
- Puerto Rico Public Finance Corporation (PFC)
- Puerto Rico Sales Tax Financing Corporation (COFINA)
- Puerto Rico Aqueduct and Sewer Authority (PRASA)
- Government Development Bank for Puerto Rico (GDB)
- Puerto Rico Employees Retirement System (ERS)
- Puerto Rico Electric Power Authority (PREPA)
- Puerto Rico Highways & Transportation Authority (PRHTA)
- Puerto Rico Housing Finance Authority (PRHFA)
- Puerto Rico Industrial Development Company (PRIDCO)
- Puerto Rico Infrastructure Financing Authority (PRIFA)
- Puerto Rico Public Buildings Authority (PBA)
In addition to the two cases above, Aquino recently has been the subject of six additional customer complaints, dating from 2001-2016, according to his CRD report:
- December 2016. “Claimants alleged, inter alia, unsuitability with respect to municipal bond investments – 2012 to 2015.” The customer seeks damages of $6 million.
- July 2016. “Claimants alleged, inter alia, unsuitability with respect to the Puerto Rico closed-end fund investment – 2012 to 2013.” The case is pending.
- November 2015. “Claimant alleges unsuitable overconcentration and misrepresentations concerning closed-end funds.” The customer sought $300,000, but the case was withdrawn.
- June 2014. “The customers allege unsuitable investment recommendations and misrepresentations and omission of material facts from March 2007 to September 2009.” The claim was settled for $363,000.
- April 2014. “Claimants allege, inter alia, misrepresentation with respect to the purchases of Puerto Rico Municipal Bonds in their accounts.” The claim was settled for $65,000.
- July 2001: “Clients, through their attorney, allege transactions were made in their account without their authorization.” The customer sought $33,905-$35,000, but the case was withdrawn.
Erez Law represents investors in the United States and Puerto Rico for claims against Morgan Stanley Financial Advisor Angel Edgardo Aquino-Velez, who is alleged to dangerously concentrate customer investment portfolios in high risk and unsuitable Puerto Rico bonds.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key fiduciary duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
In addition, pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Morgan Stanley may be liable for investment or other losses suffered by Aquino’s customers.
If you were a client of Morgan Stanley Financial Advisor Angel Edgardo Aquino-Velez, and have experienced investment losses or financial irregularities, please call us at 888-840-1571 or complete our contact form. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.