Erez Law recently filed a $300,000 FINRA arbitration against Morgan Stanley.
The Erez Law client alleges the following in the newly filed FINRA claim:
The client alleges that broker Eric Kleiner (CRD #4135180) engaged in wrongful conduct causing the investment losses. The claimant entrusted him and Morgan Stanley with his investments. The Erez Law client and the broker had been friends for many years, before he left Wells Fargo for Morgan Stanley in 2016.
He was a registered representative of Morgan Stanley in New York, New York, from 2016 to 2025, when he was terminated regarding, “Allegations related to recommendations to customers of non-firm approved and firm restricted investments, including ones in which Mr. Kleiner was also invested, failure to fully disclose outside investment, and use of personal device to engage in unauthorized disclosure of confidential, internal use only Firm information.”
Morgan Stanley allegedly fired him for his TerrAscend-related activities. The “non-firm approved and firm restricted invested” was TerrAscend, a cannabis company that Morgan Stanley prohibited its brokers from recommending. Erez Law alleges that he engaged in an illicit and prohibited practice commonly referred to as “selling away” in connection with his recommendation to the client and other clients to open accounts at other brokerage firms and invest in TerrAscend.
Kleiner allegedly represented to the client that the stock was “going to take off,” that the federal government was going to regulate cannabis sales and that it was the perfect time to buy the stock. He even recommended that the client’s elderly mother, who was also his client, invest in TerrAscend.
According to the claim, his investment strategy that he recommended to the client was to liquidate his entire Morgan Stanley retirement account and invest all the proceeds in TerrAscend. Kleiner represented to the client that the investment in TerrAscend was superior to his holdings at Morgan Stanley.
Regrettably for the Erez Law client, the price of TerrAscend stock collapsed to 28 cents. The client lost virtually all of his retirement savings. While the price of the stock was falling, Kleiner recommended that the client hold the stock and refrain from selling. In fact, Kleiner texted the client “Yes it will 100% come-back. And this will all just be a bad dream.” In reality, the bad dream that Keiner caused has not gone away and Morgan Stanley is responsible.
By virtue of him recommending and selling an unapproved investment, it is alleged that Morgan Stanley did not do any required due diligence on the investment and it was therefore unsuitable. In fact, Morgan Stanley prohibited its brokers from recommending TerrAscend because it was unsuitable for its clients.
Regrettably, it is alleged that the client followed his Morgan Stanley broker and friend’s recommendation to his severe detriment.
In addition, his recommendation to the client to gamble all of his retirement savings on one speculative cannabis stock was reckless, unsuitable and not in the client’s best interest.
Morgan Stanley has a legal obligation to supervise Eric Kleiner and to ensure that he complies with all applicable securities laws and rules. Erez Law alleges that Morgan Stanley failed to adequately supervise the broker, who allegedly used text messaging on his private device to communicate with clients about TerrAscend. This illicit conduct prevented the firm from supervising his communications as it is required to do.
In addition to the case above, he recently has been the subject of three additional customer complaints, dating from 2008 to 2023, two of which were denied, according to his CRD report.
How to File a Claim Against Eric Kleiner
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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