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Regulation and Compliance > Federal Regulation > FINRA

FINRA Suspends Ex-Morgan Stanley Rep for Misusing Expense Account

By Jeff Berman

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The Financial Industry Regulatory Authority suspended an ex-Morgan Stanley broker for six months from association with any FINRA member in all capacities for allegedly misusing funds from her Automated Flexible Grid account at the firm, according to FINRA.

Without admitting or denying the findings, Jacqueline Jacobsen signed a letter of acceptance, waiver and consent March 20 in which she agreed to FINRA’s suspension and a $5,000 fine. FINRA accepted the letter Wednesday.

Morgan Stanley and Jacobsen declined to comment Thursday. AdvisorLaw, the Westminster, Colorado law firm that represented her in the FINRA dispute, did not immediately respond to a request for comment.

Jacobsen joined Morgan Stanley in 2009 and remained with the firm until it terminated her in August 2018, according to the FINRA AWC letter. Morgan Stanley filed a Form U5 Sept. 21, 2018, saying it discharged her over concerns related to her improper use of its AFG program outside of the firm’s systems, FINRA said.

During 2016, in order to participate in the AFG program, Jacobsen acknowledged to Morgan Stanley in writing that she would use funds only for those specified as business-related expenses, according to the FINRA AWC letter. Jacobsen also acknowledged that any unused funds set aside for 2016 in her AFG account would be forfeited to the firm if they were not disbursed in accordance with firm policy by the end of January 2017.

However, in late 2016, Jacobsen allocated about $3,200 to another Morgan Stanley employee to provide that client service associate with a year-end bonus, “on the condition the other employee would return a portion of that amount back” to Jacobsen in 2017, outside the firm’s systems, according to the letter and a disclosure on Jacobsen’s profile at FINRA’s BrokerCheck website. Jacobsen was terminated Aug. 23, 2018, according to BrokerCheck.

The incident involved exactly $3,221.91, which was the amount remaining in Jacobsen’s AFG account, according to the FINRA AWC letter. “Contrary to Jacobsen’s representations” to the firm and “without notice to or permission from” the firm, Jacobsen asked the CSA to give about $1,200 of the AFG bonus funds to Jacobsen, FINRA said, adding  Jacobsen “did not use these funds for any approved business-related purpose.”

As a result of her conduct, Jacobsen violated FINRA Rule 2010 (governing standards of commercial honor and principles of trade), FINRA said.

Jacobsen’s LinkedIn profile indicates that she served as first vice president of wealth management with Morgan Stanley and currently serves as managing partner and registered principal at Sycamore Wealth Management. Her BrokerCheck profile, meanwhile, says she remains registered with FINRA through her association with Independent Financial Group.

Jeff Berman

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