Jeffrey Allen Russell, of Newport Beach, California, a stockbroker registered with Morgan Stanley, has been fined $5,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Russell engaged in unauthorized trading in customer accounts. Letter of Acceptance, Waiver, and Consent No. 2021071685401 (November 16, 2023).
Initially, Morgan Stanley filed a Form U5 in June 2021, reporting Russell’s discharge as a stockbroker due to concerns about unauthorized trading in customer accounts and failing to escalate a customer complaint. An amendment to this Form U5 was filed in February 2023, disclosing a customer complaint alleging unauthorized mutual fund purchases in 2021.
According to the AWC, the core of FINRA’s enforcement action against Russell revolved around Russell’s actions in February of 2021. During this time, he executed 657 unauthorized purchases of a money market mutual fund across 610 customer accounts. Additionally, between December of 2020 and March of 2021, Russell made unauthorized purchases of a different mutual fund, one invested in mortgage-backed securities (MBSs), in the accounts of six customers. Morgan Stanley’s policies prohibited orders without prior customer approval. Russell’s actions violated FINRA Rule 2010.
FINRA Public Disclosure also shows that on June 1, 2005, a customer filed an investment related complaint involving Russell’s conduct, requesting $75,000.00 in damages. The complaint stated that Russell failed to disclose fees and made unsuitable recommendations while associated with Merrill Lynch Pierce Fenner Smith Inc. The complaint was denied.
On March 22, 2023, a different customer-initiated investment related complaint involving Russell’s conduct was settled for $16,000.00 in damages. The complaint was based on allegations that Russell conducted unauthorized trading in mutual funds in 2021 while associated with Morgan Stanley.
Russell was associated with Morgan Stanley in Newport Beach, California, from May 19, 2010, to June 16, 2021.
