FINRA

Wells Notice examination #20220773305: FINRA made a preliminary determination to recommend that disciplinary action be brought against Joseph Eisler alleging violation of FINRA Rules 2150(c) and 2010 for improperly sharing in customer profits; violation of FINRA Rules 4511 and 2010 for using text messages to conduct securities business, causing his firm to maintain incomplete books and records; and violation of FINRA Rule 2010 for improperly disclosing confidential trading strategies of a third-party fund manager.

MSWM

Voluntary Resignation

The representative resigned after he had been placed on administrative leave pending further investigation into (i) allegations of unauthorized sharing of confidential client trading information through an unapproved messaging platform and (ii) an alleged agreement with a client to receive unapproved compensation in exchange for certain trading opportunities.

CLIENT'S ATTORNEY ALLEGES, INTER ALIA, MISREPRESENTATION WITH RESPECT TO TRADING IN THE CLIENT'S ACCOUNT 2011-2022

$900,000.00

I vehemently deny all allegations of wrongdoing. The client directed all trading in his account and was fully aware of and participated in the activities underlying his claim. However, in order to avoid the costs, uncertainty and distraction of an arbitration, I made the decision to contribute to the settlement to bridge the gap between Morgan Stanley's last settlement offer and the client's last settlement demand.

IT IS CLAIMED, INTER ALIA, THAT TRANSACTIONS MADE IN EARLY 2008 WERE ALLEGEDLY UNAUTHORIZED AND UNSUITABLE.

MORGAN STANLEY THOROUGHLY INVESTIGATED THIS COMPLAINT AND FOUND IT TO BE COMPLETELY BASELESS AND WITHOUT MERIT. IN FACT, THE CLIENT SIGNED A LETTER LISTING HER PLANNED INVESTMENTS, AND SO THERE IS CLEAR DOCUMENTARY EVIDENCE THAT THE INVESTMENTS WERE NOT UNAUTHORIZED. FURTHERMORE, THE CLIENT WAITED TWO YEARS TO RAISE ANY COMPLAINT. THIS COMPLAINT WAS COMPLETELY DENIED IN ITS ENTIRETY.

IT IS CLAIMED, INTER ALIA, THAT ADVISER ALLEGEDLY FAILED TO FOLLOW CUSTOMER'S INVESTMENT INSTRUCTIONS & INVESTED IN UNSUITABLE SECURITIES IN 2008.

$59,922.00

I STRONGLY DENY THE ALLEGATIONS OF THE COMPLAINT. IN FACT, MORGAN STANLEY'S INVESTIGATION OF THE CUSTOMER'S CONCERNS HAS REVEALED THAT THE COMPLAINT WAS BASELESS, UNFOUNDED, AND THERE WERE NO FACTS SUPPORTING THE ALLEGATIONS. THERE WAS NO FINDING OF WRONG-DOING BY ME AND THE CUSTOMER'S COMPLAINT WAS DENIED IN FULL.

CUSTOMER ALLEGES THAT THE CREDIT RATING OF THE UNDERLYING BOND ISSUER WAS NOT APPARENT ON CONFIRMATIONS AND ACCOUNT STATEMENTS; HAD HE BEEN GIVEN THE INFORMATION TIMELY, CUSTOMER WOULD HAVE SOLD ALL POSITIONS WHERE THE UNDERLYING ISSUER WAS NOT AAA RATED AHEAD OF THE AUCTION FAILURES. UNABLE TO DETERMINE ALLEGED DAMAGES TO BE UNDER $5000.00.

$6,150,000.00

THIS MATTER INVOLVES AUCTION RATE SECURITIES (ARS), THE MARKET FOR WHICH SUFFERED WIDESPREAD AUCTION FAILURES AND ILLIQUIDITY AS OF MID-FEBRUARY 2008, OVER WHICH THE FINANCIAL ADVISOR HAD NO CONTROL. THE ALLEGATIONS AGAINST THE FA ARE DENIED. THE FIRM REPURCHASED THE ARS AT ISSUE FOR THEIR FULL PAR VALUE. THE FINANCIAL ADVISOR DID NOT MAKE ANY PAYMENTS TO THE CLIENT, AND WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THE AMOUNT OF THE SETTLEMENT REPORTED ABOVE IS BASED ON FINRA REGULATORY NOTICE 09-12, WHICH PROVIDES THAT THE AMOUNT OF THE SETTLEMENT OF ARS MATTERS SUCH AS THIS ONE MUST BE REPORTED AS THE FULL PAR VALUE OF THE REPURCHASED ARS.