Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jesus Rodriguez (Rodriguez), previously associated with Morgan Stanley, has at least 4 disclosable events. These events include 3 customer complaints, one civil event, alleging that Rodriguez recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint on November 15, 2024.
Clients alleged fa used funds deposited in their morgan stanley account to purchase investments away from morgan stanley 2019
FINRA BrokerCheck shows a pending customer complaint on January 24, 2024.
The securities and exchange commission (the ‘commission’), for its complaint against jesus rodriguez (‘rodriguez’ or ‘defendant’), alleges that from approximately 2014 through 2021 (the ‘relevant period’), rodriguez engaged in a fraudulent scheme to misappropriate more than $3.4 million from the accounts of at least ten investors (the ‘investors’) while he served as their registered representative and/or investment adviser representative at a large financial institution dually-registered with the commission as a broker-dealer and investment adviser. Rodriguez carried out his misappropriation scheme by initiating fraudulent disbursements of funds primarily through unauthorized ach transfers, wire transfers, and cash journal transfers to other accounts at the firm. In a number of instances, rodriguez misappropriated from the investors’ accounts by incurring unauthorized indebtedness collateralized by their securities accounts. In other instances, rodriguez sold securities from investors’ accounts shortly before misappropriating all or part of the sales proceeds. Rodriguez was also an investment adviser to three of the defrauded investors and he breached his fiduciary duties to them by misappropriating their funds and/or by making false statements to them. By reason of the foregoing, rodriguez, directly or indirectly, singly or in concert, has violated and, unless enjoined, will again violate exchange act section 10(b) and rule 10b-5 thereunder and sections 206(1) and (2) of the advisers act.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $2,845,953.00 on August 28, 2023.
Client’s attorney alleges, inter alia, forgery and misappropriations of funds from the client’s account from 2014 – 2021.
FINRA BrokerCheck shows a pending customer complaint on April 07, 2023.
Client alleges, inter alia, that funds were fraudulently transferred out of his account 2016-2021
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Every recommendation’s cost and investor details are essential parts of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, rather than depending solely on the issuer for company information, a brokerage firm should conduct its own reasonable investigation.
Additional, it should be required to mandate broker disclosures for investor’s protection. Brokers are required to reveal important events, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, publicly on their BrokerCheck reports. FINRA has recognized that recent research shows brokers with a past record of regulatory or customer complaint issues are more likely to have such problems again in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Rodriguez has been in the securities industry for more than 15 years. Rodriguez has been registered as a Broker with Morgan Stanley since 2009.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.