In January 2018, a former client of Morgan Stanley Smith Barney LLC broker John Yeoman (CRD #867840) settled a FINRA arbitration case for wherein he sought compensatory damages for losses sustained from unsuitability of stock positions in Energy Transfer Equity; Enterprise Partners; Targo Resources; Cheniere Energy; Semgroup; Williams Partners; Moblieye; and Seaspan.
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. The volatile energy sector experienced significant turmoil, and many energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
The causes of action included securities fraud; common law fraud; fraudulent misrepresentation and omission; unsuitability; overconcentration; negligence; breach of fiduciary duty; breach of contract, and failure to supervise in violation of federal securities laws, Hawaii state securities laws (Hawaii Revised Statutes § 485A509), FINRA Rules and common law. The FINRA arbitration hearing was conducted in Honolulu, Hawaii.
Yeoman has been registered with Morgan Stanley in Chicago, Illinois since 2009.
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 Smith Barney LLC may be liable for investment or other losses suffered by Yeoman’s customers.
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