What You Need to Know
- The broker earned income from a beachfront property in Panama he owned but did not inform Morgan Stanley.
- The broker also borrowed $307,000 from two clients without informing the firm or gaining its approval.
- FINRA says he violated FINRA Rules 2010, 3240 and 3270.
The Financial Industry Regulatory Authority has suspended a broker for four months and fined him $7,500 for not disclosing to Morgan Stanley that he owned a beachfront rental property in Panama he was earning income from and that he borrowed $307,000 from two clients, according to FINRA.
Without admitting or denying the findings of FINRA’s investigation, 27-year industry veteran Steven Patrick Melen signed a FINRA letter of acceptance, waiver and consent Tuesday, consenting to the imposition of the regulatory group’s sanctions. FINRA signed the letter Thursday.
Melen was registered as a general securities representative through an association with Morgan Stanley from May 11, 2007, until April 1, 2019, when the firm filed a Form U5 reporting Melen’s voluntary termination, according to FINRA.
On April 8, 2019, Morgan Stanley amended Melen’s Form U5 to disclose that he was under internal review regarding whether he had “borrowed funds from a client, without disclosing the arrangement to the firm,” FINRA said.
That same month, Melen joined LPL Financial and is still registered with them, according to his report on FINRA’s BrokerCheck website.
It was not clear on Friday if Melen’s suspension had started or if he had paid the fine yet.
Morgan Stanley, LPL and Katherine S. Bowles, a partner at the law firm Shustak Reynolds & Partners who represented Melen in the FINRA disciplinary action, did not immediately respond to requests for comment.
In welcoming Melen to LPL in April 2019, the firm said he “reported having served approximately $100 million of client brokerage and advisory assets.”
LPL also noted that “Melen’s life has been full of trials and tribulations, and it is those experiences that have been the driving force in how he approaches business.” Melen was “diagnosed with terminal stomach cancer in 2008, he beat the odds, strengthening his resolve in all he approaches and inspiring ways he can serve others,” LPL added.