Erez Law is currently investigating Morgan Stanley financial advisor Stephen Taft (CRD# 1927300) regarding losses sustained from investments in oil and gas master limited partnerships (MLPs). Taft has been registered with Morgan Stanley in New York, New York since 2009.
In August 2016, Taft was found liable and ordered to pay $397,823 in compensatory damages, interest at 9% per annum from March 23, 2016 until the award is paid in full, $15,000 in costs, $20,000 for discovery sanctions based on untimely production of documents near or at hearing, and attorneys’ fees regarding a customer complaint alleging unsuitability and breach of fiduciary duty and contract. According to the award, “Taft was a subject of the customers’ complaint that asserted the following causes of action: breach of fiduciary duty; breach of contract; unsuitability; violation of FINRA Rule 2020; negligence; violation of The Investment Advisor Act of 1940; violation of New York General Business Law § 349(a); violation of Florida Statutes § 517.301; and respondeat superior and failure to supervise.”
The causes of action relate to Claimants’ investments in equities, and oil and gas MLPs. Master limited partnerships (MLP) are limited partnerships that are publicly traded and combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. MLPs are offered in two classes: limited partners and general partners. Limited partners are comprised of investors who purchase units in the MLP to provide the capital for the operation and receive income distributions from the MLP’s cash flow. On the other hand, general partners manage the day-to-day operation of the MLP and receive compensation based on the MLP’s performance. Many financial advisors recommended MLPs to elderly and retired investors seeking income during their retirement years and often represented these investments as bond alternatives. They were not. Regrettably, many investors have only learned the true risks associated with MLPs and MLP funds after they sustained massive losses.
Taft has been the subject of two additional customer complaints, one of which was denied, according to his CRD report.
July 2010. “Time Frame: May 2008-September 2008. Sales Practice Violations. Unauthorized Trading And Excessive Commissions Involving Common Stock And Mutual Funds.” The customer sought $160,000 in damages and the case was settled for $33,000.
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 Taft’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.