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Morgan Stanley

FINRA Fines Morgan Stanley $13 Million

Morgan Stanley fined for failing to supervise sales of UITs, Penn University wins dismissal of retirement plan lawsuit and Focus financial helps member firms merge.

The Financial Industry Regulatory Authority has levied a $3.25 million fine and $9.78 million in restitution costs against Morgan Stanley Smith Barney “for failing to supervise its representatives’ short-term trades of unit investment trusts (UITs).” FINRA found that more than 3,000 customers were affected by improper sales and practices. Between January 2012 and June 2015, hundreds of Morgan Stanley representatives executed short-term UIT rollovers, including some more than 100 days before maturity. In addition, FINRA found that Morgan Stanley failed to adequately supervise representatives’ sales of UITs and conduct training for registered representatives specific to UITs. The firm has neither admitted nor denied the charges, but consented to FINRA’s findings. As a result of this case, FINRA launched a targeted exam focused on UIT rollovers in September 2016.

Penn Wins Lawsuit Challenging Retirement Plan Fees


The University of Pennsylvania successfully rebuffed every charge in a class action lawsuit against the university challenging the fees and investment options within its retirement plan. The ruling is the first complete victory for a college accused of retirement plan mismanagement. Yale, Vanderbilt, Johns Hopkins, Cornell, New York University, Columbia, Duke, Emory, MIT and Princeton all face similar litigation, according to Bloomberg BNA. In the Penn suit, Judge Gene E.K. Pratter of the U.S. District Court for the Eastern District of Pennsylvania ruled that fiduciaries aren't required to maintain a "myopic focus on the singular goal of lower fees," and rejected the theory that plan fiduciaries can breach their duty by offering too many investment options.

Focus Helps Two Partners Close Deals


Focus Financial Partners helped facilitate mergers for two partner firms. Focus partner Carnick & Kubik Group in Denver has merged with First Houston Capital, an independent RIA in Houston, marking Carnick & Kubik’s first deal since joining the Focus partnership in 2016. JFS Wealth Advisors, a Focus partner firm in Hermitage, Pa., penned a deal with Anchor Financial Group, a wealth management firm in Camp Hill and Lancaster, Pa. This is JFS’s fourth merger since joining the Focus partnership. “Focus’ ability to provide access to capital and extensive M&A expertise has been instrumental in helping our partner firms expand their capabilities and increase their geographic presence,” said Rudy Adolf, founder and CEO of Focus.


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