Were you the victim of Eric Kleiner (CRD #4135180)? Erez Law recently filed two customer complaints related to customer complaints against the broker related to recommending investments in the stock TerrAscend.
Morgan Stanley fired him for his TerrAscend-related activities in April 2025. The “non-firm approved and firm restricted invested” was TerrAscend, a cannabis company that Morgan Stanley prohibited its brokers from recommending.
Additionally, Morgan Stanley paid $125 million to settle texting-related charges. He allegedly used text messaging on his private device to communicate with clients about TerrAscend, preventing the firm from supervising his communications as it is required to do.
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.
He allegedly represented to clients 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.
Erez Law Files Complaint For TerrAscend Losses
Erez Law filed a $300,000 FINRA arbitration against Morgan Stanley. The client alleges that the broker 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.
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. He even recommended that the client’s elderly mother, who was also his client, invest in TerrAscend. Erez Law is also representing his mother in a separate case.
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 the broker 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.
Erez Law Files Complaint For Selling Away
Erez Law filed a FINRA arbitration against Morgan Stanley related to accusations of selling away. The client alleges that the broker engaged in selling away in connection with his recommendation to open accounts at other brokerage firms and invest in TerrAscend.
The complaint alleges that he recommended, sold, and participated in this private securities transaction without Morgan Stanley’s required approval and in violation of compliance rules.
Morgan Stanley did not do the 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.
In addition, his recommendation to the client to gamble her retirement savings on a speculative cannabis stock was reckless, unsuitable, and not in her best interest. He also allegedly failed to adequately disclose the risks attendant to his investment strategy, causing upwards of $500,000 in investment losses.
Erez Law Files Million-Dollar-Plus Complaint For TerrAscend and Canopy Rivers Losses
Erez Law filed a FINRA arbitration against Morgan Stanley related to losses related to cannabis stock losses. The complaint alleges that the broker recommended the clients invest their 401k proceeds in cannabis stocks, including TerrAscend Corp. and Canopy Rivers, despite seeking growth-oriented investment objectives. The target funds that Kleiner recommended were heavily allocated to fixed income securities or bonds and were not suitable for investors interested in growth or in their best interest.
The complaint alleges that the broker was “putting kids through college” based on the anticipated gains in TerrAscend and that the federal government was going to regulate cannabis sales. Despite Morgan Stanely putting TerrAscend on its restricted list for various reasons, he did not disclose this to his client when he solicited the clients to invest in the speculative penny stock. By placing TerrAscend on its restricted list, the firm determined the stock lacked reasonable basis suitability and was unsuitable for any of its clients. Additionally, instead of liquidating the investments, he allegedly repeatedly recommended the clients to buy additional shares of TerrAscend.
The broker also allegedly recommended the clients buy additional shares of TerrAscend outside of Morgan Stanley. By the broker recommending and selling an unapproved investment, the firm did not do any required due diligence on the investment and it was therefore unsuitable. And regrettably for the Erez Law client, despite the stock price deteriorating, the broker allegedly recommended that the client hold his shares and refrain from selling until he was fired from Morgan Stanley in March 2025.
It is also alleged that he engaged in irrational and unsuitable market timing with the clients’ 401K accounts. In March 2022, the broker recommended that the clients sell or begin selling their target funds and reinvest the proceeds in a money market fund, stating they needed to “get out of the market” and that he would recommend when to reenter the market.
Due to his egregious misconduct, the Erez Law clients allegedly did not participate in the very significant market gains while he was their broker of record.
Erez Law Files Complaint For TerrAscend and Canopy Rivers Losses
Erez Law filed a FINRA arbitration against Morgan Stanley related to TerrAscend Corp. and Canopy Rivers losses. The complaint alleges that despite his knowledge that TerrAscend was on the restricted list, he repeatedly recommended to the client, and other clients, to buy shares of TerrAscend at another brokerage firm. It is alleged that when TerrAscend was at $5 a share, he texted the client,“Remain tempered and even keeled at any price!!! We will celebrate when above 20 [dollars per share]”. And when the Erez Law client questioned strategy and losses, he allegedly pushed back recommending the client ignore the market, stating the projects
anticipate up to 400 percent increase in the long term. Regrettably for the Erez Law client, the losses have had a devastating impact on the client and his family.
According to the claim, the broker allegedly used text messaging on his private device to communicate with the client about TerrAscend. This illicit conduct prevented Morgan Stanley from supervising his communications as it is required to do.
Eric Kleiner Background, Registrations, and Regulatory Sanctions
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. He 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.”
FINRA barred him in October 2025. According to his CRD, “Without admitting or denying the findings, Kleiner consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA during an investigation that originated from its review of the Form U5 filed by his member firm. The finding stated that the firm filed the Form U5 stating that it discharged Kleiner due to concerns related to his recommendation of non-firm approved and firm restricted investments to customers, including ones in which he was also invested, failure to fully disclose outside investment, and use of a personal device to engage in unauthorized disclosure of confidential, internal use only firm information.”
Eric Kleiner Customer Complaints
He has been the subject of 11 customer complaints, between 2008 and 2026, two of which were denied, according to his CRD:
January 2026. “Claimants allege, inter alia, that FA recommended investment in an outside investment security that was not approved by MS from November 2018 to March 2025.” The customer is seeking $165,000 in damages.
December 2025. “Claimants allege, inter alia, that FA recommended investment in an outside investment security that was not authorized by MS – August 2018 to March 2025.” The case is currently pending.
October 2025. “Claimant alleges, inter alia, that FA recommended investment in an outside investment security that was not authorized by MS as well as being unsuitable and not in their best interests – 2018 to 2025.” The case is currently pending.
July 2025. “Claimant alleged, inter alia, FA recommended outside investment not authorized by the firm – May 2018 to March 2025.” The case is currently pending.
May 2025. “Claimant alleged, inter alia, FA recommended outside investment not authorized by the firm – Sept 2020 to March 2025.” The customer is seeking $400,000 in damages.
April 2025. “Claimant alleged, inter alia, FA recommended outside investment strategy not authorized by the firm – Nov 2020 to March 2025.”
April 2025. “Claimant alleged, inter alia, FA recommended outside investment strategy not authorized by the firm.” The case is currently pending.
April 2025. “Claimant alleged, inter alia, that the investments strategy executed in the client’s account was unsuitable 2016-2025.” The case was settled for $700,000.
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.