Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker Michael Schmidt (Schmidt) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Schmidt was employed by Morgan Stanley at the time of the activity. If you have been a victim of Schmidt’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a settled customer complaint on December 14, 2022.
Claimant alleged, inter alia, forgery and misappropriation of funds from inherited IRA account 2019-2022.
We specialize in representing victims of fraud when financial advisors take loans from clients or facilitate securities transactions through OBAs. “Selling away” is the industry term for the sale of unauthorized investments, fraudulent financial schemes that cover up misappropriated funds, and other illicit activities, all of which constitute a serious violation of securities laws. The term “selling away” in the industry refers to financial advisors promoting investments in businesses, promissory notes, or securities that their affiliated brokerage firm has not approved. While some of these investments may have a degree of legitimacy, they often turn out to be Ponzi schemes or involve advisors misappropriating funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. To adequately supervise their brokers, firms must implement systems that track advisors’ activities and communications 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.
Schmidt has been in the securities industry for more than 30 years. Schmidt 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.