Matthew M. Serth, of McClean, Virginia, a stockbroker formerly registered with Morgan Stanley, has been fined and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected unauthorized transactions in customers’ accounts. Letter of Acceptance, Waiver and Consent, No. 2016051495801 (July 31, 2017).
According to the AWC, FINRA was apprised by Morgan Stanley on September 27, 2016, that Serth’s registration was terminated in August of 2016 based upon allegations that his activities were internally reviewed for potential unauthorized transactions having been effected in customer accounts. The AWC revealed that in June of 2016, Serth effected transactions in the accounts of customers VDG, PN, EVS and TVS, all of whom had accounts that did not permit Serth’s discretionary trading.
Serth reportedly effected a June 28, 2016 order in TVS’s account for Blackrock Low Duration Bond Portfolio Fund shares to be purchased, wherein the customer incurred $15,000.00 in net costs in connection with the transaction. Serth then entered a purchase order for the same Fund in EVS’ account, wherein EVS incurred $86,000.00 in net costs. Evidently, the customers’ transactions were effected by Serth without customers’ knowledge and consent.
The AWC also detailed that on June 30, 2016, TVS’s account was subject of another purchase order initiated by Serth, in which $15,000.00 was used to buy Blackrock Global Allocation Fund. Serth additionally placed a buy order for Lord Abbett Trust Diversified Equity Strategy Fund in PN’s account, costing a total of $9,000.00. Again, Serth apparently failed to gain the customers’ consent regarding the transactions. FINRA found that Serth’s unauthorized trading was conduct violative of FINRA Rule 2010.
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