Joshua Washington, a broker formerly associated with Morgan Stanley (CRD 149777) in Utah, is facing serious allegations from a client who claims that Washington misused margin and failed to follow instructions to liquidate securities. The complaint, filed on February 12, 2024, is currently pending resolution.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Forbes article, investment fraud is on the rise, with scammers increasingly targeting vulnerable individuals, such as retirees and those with limited financial knowledge.
The Allegations Against Joshua Washington
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According to the complaint, the client alleges that Joshua Washington used margin to fund a wire transfer without the client’s authorization. Additionally, the client claims that when they instructed Washington to liquidate securities to fund the transfer, he failed to follow through with these instructions.
Understanding Margin and FINRA Rules
Margin is a loan provided by a brokerage firm, allowing investors to purchase securities with borrowed funds. While margin can amplify potential returns, it also increases risk. FINRA Rule 2264 requires brokers to provide specific disclosures and obtain client consent before opening a margin account.
Failing to follow a client’s instructions to liquidate securities is a serious breach of a broker’s fiduciary duty. FINRA Rule 2010 requires brokers to observe high standards of commercial honor and just and equitable principles of trade, which includes acting in the best interest of their clients.
The Importance for Investors
This case highlights the importance of understanding the risks associated with margin and the need for clear communication between investors and their brokers. Investors should be aware of their account settings and regularly review their statements to ensure that all transactions align with their instructions and investment goals.
When a broker fails to act in their client’s best interest or disregards their instructions, it can lead to significant financial losses. Investors who have experienced such misconduct may be entitled to recover damages through FINRA arbitration.
Red Flags and Recovering Losses
Investors should be vigilant for red flags that may indicate broker misconduct, such as:
- Unauthorized transactions
- Failure to follow client instructions
- Excessive or unsuitable use of margin
If you suspect that your financial advisor has engaged in misconduct, it is crucial to consult with an experienced investment fraud attorney. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Joshua Washington and Morgan Stanley.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. They offer free consultations and operate on a contingency basis, meaning there are no fees unless they recover money for their clients.
If you have invested with Joshua Washington or Morgan Stanley and believe you may have been the victim of investment fraud or misconduct, contact Haselkorn & Thibaut at 1-888-885-7162 for a free consultation.
