Richard S. Botkin, of Roseville, California, a stockbroker formerly registered with Morgan Stanley, has been fined $15,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected private securities transactions without notification to his firm. Letter of Acceptance, Waiver and Consent, No. 2015045890001 (June 30, 2017).

According to the AWC, in September of 2012, Morgan Stanley was contacted by Botkin in reference to his involvement with a company that was set up to make a documentary, wherein the firm approved of his involvement as an outside business activity. The AWC stated that $170,000.00 worth of shares of the production company were then sold by Botkin to four Morgan Stanley customers; Botkin later effected the sale of $75,000.00 in shares of the production company to two additional investors that did not maintain investment portfolios at Morgan Stanley.

The AWC revealed that Botkins took part in advertising the investments in the production company to prospective investors. He reportedly provided customers with suitability questionnaires, subscription agreements and further corresponded with customers in reference to the terms and conditions of their investments. The AWC stated that Botkins facilitated the transfer of investors’ funds to finance purchases, and was responsible for operating the company along with one other member.

The AWC further stated that Botkin was prohibited from facilitating securities transactions away from the firm without first notifying the firm about the nature of the transactions and obtaining the firm’s consent. Evidently, Botkin failed to provide notification to Morgan Stanley in reference to the investors’ purchases of the production company shares between January of 2013 and August of 2014. Moreover, he reportedly furnished false responses to his firm concerning his involvement in private securities transactions when prompted through a yearly compliance review. FINRA found that Botkin’s conduct in that regard was violative of FINRA Rule 2010 and NASD Rule 3040.

FINRA Public Disclosure reveals that Botkin has been identified in one additional regulatory infraction while employed with Morgan Stanley. In particular, he was censured and fined $5,000.00 for improperly sharing in a customer’s account losses; conduct violative of NASD Rules 2330(f) and 2110. Letter of Acceptance, Waiver and Consent, No. 2010022162001 (Apr. 19, 2011).

Botkin was terminated from Morgan Stanley on June 1, 2015, based upon allegations that he failed to comply with the firm’s restrictions on his outside business activities, and also failed to be forthcoming to the firm concerning his business activities. Since June 17, 2015, he has been associated with Stifel, Nicolaus & Company, Inc.

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