NASD Arbitration Panel Finds Morgan Stanley Liable And Orders Full Restitution
BEVERLY HILLS, CALIFORNIA, April 29, 2003 /PRNewswire/ – The following was released today by Aidikoff & Uhl:
A National Association of Securities Dealers (NASD) arbitration panel found liable and ordered Morgan Stanley DW, Inc. (NYSE: MWD) to pay Robert Perry and Sueellen Perry a total of $234,000 for the company’s breach of fiduciary duty and failure to supervise registered representative Marc Dupreez in its Palm Desert, California office. The brokerage firm defended the case by claiming that the downturn in the markets caused the losses. The NASD panel rejected this argument. The award represents a return of all money lost plus interest at 10 percent.
The Perry’s alleged that they sought the advice of Morgan Stanley to provide for their retirement and son’s college education. At the hearing the Perry’s proved that Morgan Stanley recommended a Roger Engemann portfolio that was concentrated in technology securities that were unsuitable based on their financial needs and station in life.
Recently Morgan Stanley agreed to pay $125 million towards penalties, disgorgement of profits and independent research and also agreed to undertake structural reforms to prevent future problems.
The Perry family was represented by Aidikoff & Uhl, a Beverly Hills and Indian Wells, California law firm that represents customers in securities arbitrations. According to Ryan Bakhtiari, who argued the case at the hearing: “Morgan Stanley let the Perry family down. Fortunately, investors like the Perry’s can turn to arbitration to resolve such disputes. This award represents a finding of 100 percent responsibility on the part of Morgan Stanley. In making this award, the NASD panel sent a message of accountability to Morgan Stanley and ordered them to pay the Perry family every dollar that they lost plus interest.”
“These types of suitability problems were pervasive in the brokerage industry between 1999 and 2001,” added Keith D. Fraser. “Often, public customers nearing retirement were told that investing in the stock market would provide for their retirement. Unfortunately for the Perry’s and other customers, Wall Street firms were caught up in the moment and abandoned bedrock investment principles like diversification.”
Aidikoff & Uhl represents customers of Morgan Stanley and other Wall Street firms who have lost money due to wrongful conduct of brokerage firms including misleading analyst recommendations.