Jeffrey Sean Crystal, of Paramus, New Jersey, a stockbroker registered with Morgan Stanley, was terminated on May 1, 2017, based upon accusations that as branch manager, he failed to supervise a financial advisor that engaged in wrongdoing.
The wrongdoer, was former Morgan Stanley stockbroker Barry Franklin Connell. Connell, whom as of even date the subject of more than twelve customer arbitratiopn claims, was terminated by Morgan Stanley in 2016 based upon allegations regarding :unauthorized withdrawals and transfers of funds from client’s household accounts to third-party payees, which appear to be for the benefit of the former registered representative.”
In one of those cases, Connell v. Morgan Stanley, FINRA Arbitration No.17-03198, the Claimant alleged, inter alia, that Connell misappropriated funds in her accounts between 2009 and 2014, and sought damages of $2,193,015.
The Claimant also named George Francis Batelli, Jeffrey Sean Crystal, Denise M. Kelly, Richard Joseph, Less Ginny Piscatay, Ardell Lynette Roan Jennifer Salmon as respondents among other thiings based upon the failure to upervise.
The case was settled for $1,350,000.00.
However, on June 7, 2019, the arbitration panel in FINRA Arbitration No.17-03198 ordered that Crystal and the other could seek the removal of the arbitration claim from their CRD Record, and specifically, that Respondent Jeffrey Sean Crystal did not manage or supervise the branch at which Barry Connell worked during the relevant period.
Interestingly enough on May 1, 2016, Morgan Stanley discharged Cyystal and told regulators that “It was mutually agreed that Mr. Crystal would resign following the termination of a firm financial advisor in a branch managed by Mr. Crystal, and public revelations about that former financial advisor’s misconduct. The firm does not believe that Mr. Crystal was aware of the financial advisor’s misconduct.”
The Claimants or their counsel do not appear to have testified at the expungement hearing. It is uncertain of any documents were submitted as to Morgan Stanley’s written supervisory procedures, but the Panel did obtain “testimony” including but not limited to Jeffrey Crystal’s Affidavit, emails relevant to Claimants’ knowledge of Barry Connell’s activities
Financial Industry Regulatory Authority (FINRA) Public Disclosure confirms that Crystal has been subject of four customer initiated investment related disputes pertaining to accusations of his wrongdoing while he was employed with Morgan Stanley. In particular, on December 21, 2000, a customer filed an investment related written complaint involving Crystal’s conduct, supported by allegations that Crystal effected unsuitable stock and open-end mutual fund purchases in the customer’s account.
Then, on April 16, 2001, a customer filed an investment related written complaint regarding Crystal’s activities, where the customer sought $193,000.00 in damages grounded on allegations that Crystal placed trades that were not suitable for the customer, and churned the customer’s investment portfolio. Thereafter, on May 1, 2003, a customer initiated investment related arbitration claim pertaining to Crystal’s activities was resolved for $80,000.00 in damages supported by accusations that Crystal made unsuitable investment recommendations to the customer in reference to over-the-counter equities transactions placed in the customer’s brokerage account.
Moreover, on March 26, 2004, a customer initiated investment related civil action involving Crystal’s conduct was settled for $5,000.00 in damages supported by allegations including breach of fiduciary duty, negligence, representation, and fraud. The customer also alleged that Morgan Stanley failed to supervise mutual fund transactions effected in the customer’s account.
