What You Need to Know
- Two ex-Morgan Stanley brokers were suspended and fined by FINRA for multiple securities violations.
- They allegedly made misleading statements about investments to hundreds of Morgan Stanley clients and prospective clients.
- One of them was fined $27,500 and given a 14-month suspension. The other was fined $10,000 and suspended a year.
Two former Morgan Stanley brokers were suspended and fined by the Financial Industry Regulatory Authority after they were terminated by the wirehouse for, among other violations, making misleading statements to clients and prospective clients.
Each of the ex-Morgan Stanley reps signed a FINRA letter of acceptance, waiver and consent in which he consented to the industry self-regulating group’s sanctions.
Bennett Robert Zamani signed his letter on Monday, consenting to FINRA’s $27,500 fine and 14-month suspension from associating with any FINRA member firm in all capacities. FINRA signed that letter the same day.
Nikolay Zotenko consented to FINRA’s $10,000 fine and one-year suspension from associating with any FINRA member firm in all capacities. The date on which he signed his letter is difficult to read on the letter. FINRA signed the letter on Friday.
Morgan Stanley declined to comment on Wednesday. Zamani and Zotenko didn’t immediately respond to requests for comment.
Over $360K Earned
In August 2016, Zamani first became associated with a FINRA member, Morgan Stanley, and on Jan. 18, 2017, he became registered as a general securities representative through his association with the wirehouse.
But, on May 29, 2020, Morgan Stanley filed a Form U5 Uniform Termination Notice disclosing it discharged Zamani over “concerns that the representative sent email to many client prospects with content about an investment opportunity, after he had sought approval for the content of the email and not received it, and took steps to avoid further review of the email by the Firm,” according to a disclosure on his report at FINRA’s BrokerCheck website.
Between January 2017 and April 2020, while registered through Morgan Stanley, Zamani participated in an outside business activity, by owning and operating a firm that offered subscription-based investment content, and earned more than $360,000 from that activity, according to FINRA.
Additionally, between August 2016 and April 2020, in connection with his outside business activity, Zamani “disseminated investment-related communications to the public,” including Morgan Stanley clients, according to FINRA.
The latter communications “failed to comply with the content standards of FINRA Rule 2210 because, among other things, they contained misleading and promissory statements and made recommendations without providing a sound basis for evaluating the facts,” FINRA alleged.
Zamani also, between June 2018 and April 2020, used a personal text messaging application that wasn’t approved by Morgan Stanley to engage in business-related communications with two clients of the firm, according to FINRA. As a result, he allegedly caused Morgan Stanley to maintain incomplete books and records in violation of Section 17(a) of the Securities Exchange Act and Rule 17a-4.
As a result of his actions, Zamani violated FINRA Rules 2010, 2210, 3270 and 4511, it alleged.