The Financial Industry Regulatory Authority has barred a former Morgan Stanley rep for conducting an alleged profit-sharing scheme with a client and using texts on his personal phone to hide it.
From at least August 2014 to June 2022, Joseph Eisler allocated shares of new issues to a customer in exchange for a portion of the customer’s realized profits when the stock was sold, in the form of excessive compensation on unrelated transactions, according to FINRA's order.
"Moreover, Eisler shared in the profits in his client’s account despite not obtaining prior written authorization from his firm or from the customer," and used text messages on his personal device to conduct securities business even though Morgan Stanley prohibited their use.
For eight years, Eisler "exchanged hundreds of text messages on his personal phone related to the firm’s securities business, including communications with the customer with whom Eisler had the new issue profit-sharing agreement," the order states.
These messages included, among other things, authorizations to execute securities transactions, trade confirmations and account performance information.
"By communicating through his personal texts, Eisler intended to hide his communications from his firm, and he knew that such communications violated firm policy," the order states.
"Indeed, each year from 2014 through 2022, Eisler falsely attested to Morgan Stanley that he complied with the firm’s prohibition against using text messages on personal devices to communicate about firm business," it said.
FINRA Rule 5131 addresses potential misconduct in the allocation and distribution of new issues and "prohibits quid pro quo allocations," according to the regulatory group.
The rule states that no "person associated with a member may offer or threaten to withhold shares it allocates of a new issue as consideration or inducement for the receipt of compensation that is excessive in relation to the services provided by the member.”
For these violations, FINRA barred Eisler from associating with any FINRA member in all capacities. Eisler accepted and consented to FINRA's findings without admitting or denying them.
Eisler served as a general securities representative and investment banking representative through an association with Morgan Stanley from June 2009 until December 2022, when the firm filed a Form U5 terminating his registration.
The Form U5 disclosed that Eisler had resigned after being placed on administrative leave pending further investigation into "allegations of unauthorized sharing of confidential client trading information through an unapproved messaging platform and an alleged agreement with a client to receive unapproved compensation in exchange for certain trading opportunities.”
Eisler remained registered with FINRA through his association with LPL Financial from Dec. 19, 2022, through March 27, 2025, according to BrokerCheck.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.