FINRA Sanctions Morgan Stanley Stockbroker For Unsuitable Bond Trading

UCC blog pic - FINRA Sanctions Morgan Stanley Stockbroker For Unsuitable Bond Trading

John Anthony Borsellino of Stamford Connecticut a stockbroker formerly employed by Morgan Stanley has been fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he gave customers bad investment advice while associated with Morgan Stanley. Letter of Acceptance Waiver and Consent No. 2018057097301 (Dec. 4, 2019).

According to the AWC, from January of 2014 to December of 2016, eight customers were advised by Borsellino to effect twenty-eight municipal bond purchases and fifteen non-municipal securities transactions. Upfront sales charges were assessed on these transactions. The AWC stated that with each of these transactions, the security had been transferred by Borsellino to the customer’s fee-based account after purchase. FINRA stated that the purchases could have been effected in the customers’ fee-based accounts instead which would have allowed customers to avoid the upfront charges. FINRA stated that customers paid $58,000.00 in upfront charges because of Borsellino’s advice which enabled him to accumulate $23,931.00.

FINRA found that Borsellino’s recommendations were unsuitable because of the stockbroker’s failure to undertake adequate due diligence and determine the impact that those transactions had on customers from a cost standpoint. Borsellino’s conduct was violative of FINRA Rules 2010 and 2111 and Municipal Securities Rulemaking Board (MSRB) Rules G-19 and G-17.

FINRA Public Disclosure confirms that Borsellino is referenced in six customer initiated investment related disputes which pertain to allegations of Borsellino’s misconduct while registered with securities broker dealers including Merrill Lynch Pierce Fenner Smith. Specifically, Borsellino is the subject of a customer initiated investment related complaint where the customer requested $14,550.00 founded on accusations of Borsellino making unauthorized trades.

Another customer initiated investment related arbitration claim regarding Borsellino’s conduct was settled for $135,000.00 in damages based upon allegations of misrepresentations being made about equity transactions executed in the customer’s account; and bad investment advice being provided by the stockbroker when he was associated with Merrill Lynch.

Borsellino is also referenced in a customer initiated investment related complaint which was resolved for $85,000.00 in damages supported by accusations that the customer had been poorly advised, and the customer’s instructions had been disregarded by Borsellino which resulted in unwarranted losses.

Borsellino is the subject of another customer initiated investment related complaint which was settled for $20,109.26 in damages founded on allegations of unauthorized mutual fund trades being effected by Borsellino in the customer’s account. Also, a customer initiated investment related complaint involving Borsellino’s activities was resolved for $11,000.00 in damages based upon accusations of Borsellino failing to inform the customer about the sales charges pertaining to mutual fund transactions that the stockbroker executed.

On January 17, 2018, Borsellino was discharged by Morgan Stanley supported by allegations or concerns of the stockbroker effecting unauthorized and suspicious transactions in customer accounts.