Morgan Stanley ordered to pay $2.4M arbitration award over former broker’s trades

Steven Mark Wyatt was let go from the firm in 2012, but his actions continue to be the subject of cases against the top wirehouse

A Finra arbitration panel has ordered Morgan Stanley to pay at least $2.4 million in the latest round of claims by clients of a former Mississippi broker who has repeatedly been accused of mishandling investments, .

A group of physicians and their family members were the latest clients to be awarded a monetary judgment after accusing former Morgan Stanley broker Steven Mark Wyatt of unauthorized and excessive stock-market trading they say cost them money during and after the 2008 financial crisis.

Mr. Wyatt purchased thinly-traded stocks for his clients that he himself owned, while also loading up his clients’ portfolios with speculative bets on exchange-traded funds and other securities, according to a lawyer for the clients who brought the case, Joseph C. Peiffer at Peiffer Rosca Wolf Abdullah Carr and Kane.

The panel decision — dated July 24 and released by the Financial Industry Regulatory Authority Inc. — is the latest in a series of claims against Mr. Wyatt and his firm and managers at his Ridgeland, Miss., branch.

Four previous cases involving Mr. Wyatt have been settled or resolved in a similar fashion without an admission of guilt. He’s been found liable in two additional cases. Two more cases are pending, according to regulatory filings.

“We’re not done with this guy,” said Mr. Peiffer, the physicians’ lawyer, who is based in New Orleans. “There were failures at every level of leadership.”

He said Morgan Stanley failed to see warning signs, including unauthorized trading.

Mr. Wyatt was discharged from Morgan Stanley in 2012 and hasn’t worked as a U.S.-registered broker since, according to his BrokerCheck report. His lawyer, George C. Freeman III of New Orleans-based Barrasso Usdin Kupperman Freeman and Sarver, did not respond to a request for comment.

Credit: INVESTMENTNEWS

Alan Rosca (1180 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


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