In January 2022, FINRA, the organization that regulates and oversees Broker-Dealers and Wall Street brokers, received a securities arbitration claim regarding Anthony Gallea, a Managing Director and financial advisor at Morgan Stanley. In the complaint, a client alleged that Anthony Gallea misrepresented his options trading strategy, resulting in the client’s sustaining unspecified damages. And this is not the first time there have been complaints made against him by his customers.
Silver Law Group represents investors in claims against financial advisors and others for breach of fiduciary duty, suitability and other claims. Our attorneys frequently assist investors in claims for misconduct relating to unsuitable options strategies, excessive fees and material misrepresentations.
Stockbrokers Have A Duty Not To Misrepresent Or Mislead Investors
FINRA’s Rule 2020 states: “No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”
Under this rule, brokers must be accurate in their representations. For example, as FINRA explains, they cannot say tell clients that they’ve got a “hot tip” for their clients if they don’t have any information. (Of course, if they do have a hot tip, that might run afoul of insider trading prohibitions.)
In the context of an options trade, misrepresentation may occur if brokers do not accurately explain how they will be making trades on a client’s behalf. It also may include inaccurate representations of the value of a stock or the risks of an options strategy. Rule 2020 also precludes other types of wrongdoing including unsuitable or misrepresented options strategies.
Stockbrokers Have A Duty To observe High Standards Of Honor
It’s also significant to note FINRA’s Rule 2010, which is like the flip-side of Rule 2020. While Rule 2020 precludes brokers from making misrepresentations, Rule 2021 requires, “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”
While this rule prohibits outright fraud or other violations of the Securities laws, the rule is much broader in application; it’s intended to prevent a broker’s bad faith or unethical conduct.
Morgan Stanley Options Trading Losses
You may be entitled to compensation if your broker has made any misrepresentations or committed any other wrongdoing that resulted in investment losses.
To find out more, contact Silver Law Group, a nationally recognized team of attorneys who help clients recover their investment losses due to investment fraud and other brokers’ wrongdoing. Call now at 800-975-4353 to schedule a free consultation.