Jeffrey Hunter Smith, of Williamsburg, Virginia, a stockbroker with Morgan Stanley, was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he obstructed an investigation into allegations of his unauthorized borrowing of customer funds. Letter of Acceptance, Waiver and Consent, No. 2015044363701 (Sept. 30, 2016).

According to the AWC, in 2011, while Smith was associated with Morgan Stanley, he borrowed $150,000.00 in funds from customer A, despite not having requisite approval from his firm. Smith reportedly arranged with customer B in 2012 to borrow $150,000.00, again without Smith obtaining Morgan Stanley’s written authorization.

The AWC further reported that Smith falsely stated that he never borrowed monies from Morgan Stanley’s clients, when prompted for such information via an annual questionnaire issued by Morgan Stanley. As such, FINRA found that Smith violated FINRA Rules 2010 and 3240. Smith was reportedly terminated by Morgan Stanley in January of 2015 amid an internal review into allegations of Smith’s unauthorized association with a trust that was not held within Morgan Stanley’s auspices.

The AWC stated that FINRA began an investigation into Smith’s conduct in June 2015, and made several requests to Smith, per FINRA Rule 8210, for Smith to provide information and documentation in connection with the allegations of his misconduct. FINRA namely sought Smith’s bank account statements, which were apparently required to be provided to FINRA by a April 29, 2016 deadline.

Apparently, Smith never provided FINRA with the documentation and information that was requested, and on July 28, 2016, via Smith’s attorney, notified FINRA personnel that Smith would not be cooperating with any such requests at any time. FINRA found that Smith’s failure to cooperate with the investigation was violative of FINRA Rules 2010 and 8210, leading to his permanent bar.

Guiliano Law Group

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