Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Miche Jean (Jean), previously associated with Morgan Stanley, has at least 4 disclosable events. These events include one customer complaint, 3 regulatory events, alleging that Jean recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on March 10, 2023.
Jean was named a respondent in a FINRA complaint alleging that he failed to provide information and documents and appear for on-the-record testimony requested by FINRA in connection with its investigation into whether he converted money from his customer through fraudulent ACH transfers to pay his personal credit card.
FINRA BrokerCheck shows a final customer complaint on September 26, 2022.
Without admitting or denying the findings, Jean consented to the sanctions and to the entry of findings that he exercised discretionary power in the accounts of customers without obtaining prior written authorization from the customers or prior written approval by his member firm. The findings stated that Jean also communicated with firm customers about securities-related business through text messages using his personal cellular phone, without the firm’s authorization or approval. Jean did not provide these messages to the firm, and he subsequently deleted them. As a result, the firm did not capture or preserve these messages.
FINRA BrokerCheck shows a final customer complaint on September 15, 2022.
Respondent violated sections 11-302(a)(1), (a)(2) and (a)(3), and 11-306 of the Maryland Securities Act by fraudulently initiating four separate ACH transfers from a customer’s brokerage account to pay for Respondent’s personal Discover credit card, and by failing to disclose his fraudulent acts to his customer, who was unaware of the fraudulent transfers until later notified by Morgan Stanley.
FINRA BrokerCheck shows a settled customer complaint on March 09, 2021.
Client alleged, inter alia, unauthorized trading with respect to exchange traded funds. – February 2020 to May 2020.
When your financial advisor is providing advice they must adhere to the SEC’s Regulation Best Interest (Reg BI) rule and standard of care. Reg BI replaced the former “suitability” rule and created a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Reg BI was meant to enhance the duties that registered representatives have to their clients by applying fiduciary principles to transactions and investment strategies by prohibiting brokers from placing their own financial interests ahead of the best interests of their client – the investor. Reg BI comes with different key obligations that associated persons must meet in dispensing advice. The care obligation requires registered representatives to carefully evaluate investment options, review the risks and rewards of the investment or service, compare similar products, and ensure that the recommended investment is appropriate for the customer and in the retail investor’s best interest.
Next, the broker must understand the investor’s investment background and profile. A customer’s profile includes information that describes the investor’s financial situation and needs. Information here will include their outside securities accounts and investments; relevant assets and debts; tax bracket; age; liquidity needs; risk tolerance; investment time horizon; experience with investing; investment objectives; and any other relevant information that the investor may choose to disclose pertinent to their situation. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest. An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Jean has been in the securities industry for more than 4 years. Jean has been registered as a Broker with Morgan Stanley since 2015.
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.