Erez Law is currently investigating former Morgan Stanley financial advisor Timothy Gibbons (CRD# 219872) regarding unsuitable investment recommendations for elderly clients in the high risk energy sector. Gibbons has been registered with Morgan Stanley in New Orleans, Louisiana from 2009 to 2015.
In November 2017, FINRA suspended Gibbons for 18 months and sanctioned him to $20,000 in civil and administrative penalties and fines and $716,749.78 in restitution. According to FINRA Letter of Acceptance Waiver & Consent (AWC), Gibbons consented to the sanctions and to the entry of findings that he made unsuitable investment recommendations to five elderly retired customers, ages 72 to 90, by over concentrating the customers’ accounts in a single high-risk energy sector security. According to the FINRA findings, Gibbons recommended that the customers invest 65-79 percent of their account values in the single high-risk energy sector security. The concentration levels in the customers’ accounts ranged from 65-79%.
FINRA found that some of Gibbons’ recommendations were unsuitable for each customer based on the customer’s age, risk tolerance, investment objectives, and financial circumstances. Gibbons’ investment recommendations resulted in collective realized and unrealized losses of more than $960,000 in the five customers’ accounts.
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.
Gibbons has been the subject of one customer complaint, according to his CRD report:
November 2015. “Claimant alleges, inter alia, that beginning in May 2014 the FA invested in stocks that were not appropriate for her investment objectives.” The case is currently pending.
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 Gibbons 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.