Providing a reminder that it’s best for advisors to never help one client at the potential expense of another client, the Financial Industry Regulatory Authority suspended an ex-Morgan Stanley broker for 90 days after he allowed a wife to make withdrawals from her husband’s retirement account without the husband’s written authorization, according to FINRA.
Broker Eugene Nathan Gordon signed a letter of acceptance, waiver and consent on Nov. 14 in which he agreed to the suspension and to pay a $5,000 fine over his actions. He agreed to the letter without admitting or denying the findings. FINRA accepted the letter Nov. 27.
Gordon entered the securities industry in December 2003, when he became associated with Citigroup Global Markets (CGM), and he remained with that firm until June 2009, when he shifted to Morgan Stanley in connection to a corporate combination involving CGM and Morgan Stanley, according to FINRA.
He was associated with Morgan Stanley until he was terminated Feb. 2, 2018, the FINRA letter of AWC says. In a Uniform Termination Notice dated Feb. 23, 2018, the firm disclosed that Gordon was terminated due to: “Conduct and record-keeping concerns involving a husband/customer’s claims that the representative allowed the husband’s wife, who was also a customer, to make withdrawals from the husband’s retirement account, without the husband’s written authorization for the withdrawals or the related transactions.”
Between January 2013 and March 2017, Gordon “effected transactions in his customer’s IRA based upon instructions given to him” by the customer’s wife, who was “not authorized to direct transactions in the customer’s account,” according to the AWC letter.
The transactions included mutual fund trades and distributions to a bank account that was held jointly by the couple, according to FINRA. By virtue of his conduct, Gordon made unauthorized transactions in violation of FINRA Rule 2010, which calls for a registered FINRA representative to “observe high standards of commercial honor and just and equitable principles of trade.”
After his termination from Morgan Stanley, Gordon became associated with Fortune Financial Services, where he has remained ever since, according to FINRA’s BrokerCheck website. Fortune, based in Monaca, Pennsylvania, according to its website, didn’t immediately respond to a request for comment. Morgan Stanley declined to comment.
The only two disclosures cited for Gordon at BrokerCheck are his separation agreement with Morgan Stanley and a customer dispute related to the actions he was terminated for that’s still pending, according to the site. As part of that dispute, the husband’s attorney claimed “there were unauthorized trading and withdrawal from the client’s account by the client’s wife” and financial advisor. The husband requested damages in the amount of $1.9 million.
Gordon and his attorney, Sean Prosser at the San Diego offices of law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, were “happy the matter has been resolved, but don’t have any comment beyond that,” Prosser told ThinkAdvisor Tuesday.