The investment fraud lawyers of Gana LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Morgan Stanley involving broker Jamie Aguilar (Aguilar) out of the firm’s San Diego, California office. According to BrokerCheck records Aguilar has been subject to three customer complaints.
According to Morgan Stanley, the firm terminated Aguilar in May 2016 after alleging his conduct included an outside financial transaction between the financial advisor and a client of the firm that was not disclosed to the firm. The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.
At this time it is unclear the nature and scope of Aguilar’s private securities transactions. However, according to brokercheck records, Aguilar has disclosed OBAs listed as including Events Magnificent, Inc. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices.
Aguilar entered the securities industry in 1998. From 1998 until June 2009 Aguilar was registered with Citigroup Global Markets Inc. From June 2009 until June 2016, Aguilar was associated with Morgan Stanley.
In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.