Unsuitable Investment Recommendations with Former Morgan Stanley Financial Advisor Stewart Malloy
Posted on Saturday, March 16th, 2019 at 10:24 am
Erez Law is currently investigating former Morgan Stanley financial advisor Stewart Malloy (CRD# 1029931) regarding unsuitable investment recommendations. Malloy was registered with Morgan Stanley in Riverhead, New York from 2009 to 2015.
In January 2019, FINRA barred Malloy after he failed to appear and provide FINRA with requested on-the-record testimony in connection with reported allegations against him, from customers’ complaint and arbitration alleging that he had made unsuitable recommendations in the accounts of two customers who alleged they lost $1 million as a result of his misconduct.
In October 2015, FINRA suspended Malloy for 30 days and sanctioned him to a civil and administrative penalty and fine of $5,000. According to FINRA, Malloy consented to the sanctions and to the entry of findings that he effected transactions in the account of customers without having obtained prior written authorization from the customers and written acceptance of the account as discretionary by his member firm. The findings stated that in addition, on a firm annual compliance questionnaire, malloy inaccurately stated that he did not have any accounts in which business was transacted on a discretionary basis.
Malloy has been the subject of eight customer complaints between 1989 and 2016, two of which were denied, according to his CRD report. Recent complaints are regarding:
August 2016. “Claimants allege, inter alia, unsuitability with respect to investments made in the accounts.” The customer sought $1 million in damages and the case was settled for $300,000. This case was regarding common and preferred stocks.
October 2015. “Client’s children allege that the energy stocks purchased in the client’s account were unsuitable for him. [acct #].” The customer sought $250,000 in damages and the case was settled for $60,000. This case was regarding common and preferred stocks.
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 Malloy’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.