Morgan Stanley discharged Kleiner on 3/18/2025 after allegations of “recommendations to customers of non-firm approved and firm restricted investments, including ones in which Mr. Kleiner 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.”
The allegations stem from seven customer disputes filed between April 16, 2025, and December 5, 2025, with similar claims of investment strategies that were not authorized by Morgan Stanley or in the clients’ best interests. One dispute includes a request for damages of $400,000. All seven disputes are currently pending.
Following his termination, FINRA initiated an investigation upon receipt of Kleiner’s Uniform Termination Notice for Securities Industry Registration (Form U5). On July 22, 2025, and August 6, 2025, FINRA sent notification letters to Kleiner requesting documents and information related to the investigation. On August 14, 2025, Kleiner’s legal counsel notified staff in a phone interview that although Kleiner acknowledged receipt of the request, he would not be forthcoming with documents and information.
Kleiner signed the Letter of Acceptance, Waiver & Consent (AWC) on September 26, 2025, and the bar became permanent on October 31, 2025.
Why Brokers Don’t Use Personal Phones
Broker-dealers and other financial services firms have compliance requirements that include the preservation and archiving of all client communication. These requirements include the use of email and other digital communications. Communications on personal devices or non-business apps like WhatsApp mean client records may not be properly recorded in the firm’s systems, and allow disclosure of confidential information. Without adherence to these requirements, a firm can find itself out of compliance with its recordkeeping obligations.
There are several reasons for firms requiring brokers to use company-issued phones and other devices:
- Recordkeeping & Supervision in accordance with FINRA Rule 3010/SEC Rule 17a-4
- Fraud prevention
- Audit trail
- Data security
- Clear policies and training for brokers
“Off-channel communications” can lead to unrecorded business discussions on advice and trading, data breaches, compliance violations, and an increased possibility of fraud and issues surrounding market integrity, such as insider information.
Did You Invest With Eric Brian Kleiner?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida, and represent investors nationwide to help recover investment losses from stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 to discuss your legal options.