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 Brian Sak (Sak). According to BrokerCheck records Sak is subject to one customer complaint and one employment separation for cause, and one judgment or lien.
According to Morgan Stanley, the firm terminated Sak after alleging Sak engaged in outside real estate investment with a client that was not appropriately disclosed to the firm. Often times such filings indicate that the broker is engaging potentially in private securities transactions, promissory notes, or loans away from 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 unclear the scope of Sak’s OBAs and/or private securities transactions. According to BrokerCheck records Sak has one customer complaint alleging that the broker sold a promissory note concerning real estate and that Sak recommended that the client invest in an outside real estate investment opportunity of which the Sak was a manager from 2011 to 2014. The complaint alleges $250,000 in damages and the dispute is currently pending. In addition, Sak disclosed a civil judgment of $2,355. An inability to pay debts may also be an indicator that a broker may solicit funds form his clients.
Sak’s records also disclose that he is involved in outside business activities including Southside Holdings, a rental property in Indiana and Chicago. 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.