Haselkorn & Thibaut has opened an investigation into financial advisor Sean Righter following multiple customer complaints and his recent termination from Morgan Stanley. Our firm’s 50+ years of experience and 98% success rate in securities fraud cases positions us to help investors recover losses from unsuitable investment practices.
Executive Summary
Table of Contents
Sean Righter (CRD# 5419832) was terminated by Morgan Stanley on January 15, 2025, for “Concerns with ending heightened supervision that had been imposed following previously reported customer complaints.” The former Irvine, California-based broker now faces multiple pending lawsuits totaling millions in damages related to unsuitable investment strategies, particularly involving high-risk ARK Invest products.
Background and Career History
Sean Righter built his career in the securities industry over nearly two decades. He began his career serving two years between 2007 and 2009 at Citigroup Global Markets Inc. in Laguna Niguel before joining Morgan Stanley in 2009, where he remained until his termination in early 2025.
Key Professional Details:
- Industry Experience: 18+ years in securities
- Former Employer: Morgan Stanley (2009-2025)
- Location: Irvine, California office
- Licenses: Registered in 25+ states
- Credentials: Series 7, Series 63, Series 65, and SIE exams
Recent Customer Complaints and Lawsuits
Current Pending Disputes
The complaints against Righter paint a concerning pattern of unsuitable investment recommendations that have cost clients millions.
Latest Customer Complaint (March 2025): A customer dispute filed on 3/12/25 alleges that Righter executed an “unsuitable” investment strategy in a client’s account. This unsuitability went from January 2021 through January 2025. The client requests damages of $1,300,000.
February 2025 Complaint: FINRA BrokerCheck shows a pending customer complaint on February 25, 2025. Claimants allege, inter alia, unsuitability with respect to investments in managed accounts – November 2020 to January 2025
Settled Disputes with Significant Payouts
Major Settlement (2023): Filed on 3/17/2023, this customer dispute also alleged unsuitability from 2020 through 2023. This claim was settled for $1,200,000.
Additional Settlement: FINRA BrokerCheck shows a settled customer complaint on August 29, 2023. coupled with another settled complaint from July 2024.
The ARK Invest Strategy Controversy
Concentration in High-Risk Products
One of the most significant concerns involves Righter’s alleged concentration of client portfolios in ARK Invest products. Sean Righter recommended clients invest through Morgan Stanley’s Select UMA (unified managed account) Program. Erez Law alleges that Sean Righter recklessly concentrated the clients’ accounts in two SMAs managed by ARK—25-30% in ARK Disruptive Innovative Strategy and 20-30% in ARK Genomic Revolution Strategy.
Understanding the Risks
From July 2023 to July 2024, ARK Invest’s suite of ETFs experienced an accumulated loss of $22 billion, making it one of the most high-profile examples of market volatility of the year. This massive loss occurred while Righter was allegedly concentrating client accounts in these highly volatile investments.
Why This Matters for Investors:
- ARK investments focus on speculative technology and innovation sectors
- These investments carry significantly higher risk than traditional diversified portfolios
- Many clients may not have understood or been suitable for such concentrated risk exposure
Red Flags Investors Should Recognize
Pattern of Unsuitable Recommendations
The multiple complaints against Righter reveal several concerning patterns:
- Overconcentration in Single Investment Strategy: Allegations suggest Righter placed 45-60% of some client portfolios in ARK products alone
- Failure to Assess Client Risk Tolerance: The FA failed to properly ascertain the client’s investor profile
- Disregard for Client Investment Objectives: Multiple complaints cite investments unsuitable for client financial goals
Supervisory Failures at Morgan Stanley
Morgan Stanley fired Sean Righter for “Concerns with ending heightened supervision that had been imposed following previously reported customer complaints.” This suggests the firm was aware of problems but failed to adequately address them before additional client losses occurred.
Understanding Suitability Requirements
Financial advisors like Righter are bound by strict suitability requirements under FINRA rules and Regulation Best Interest. The care obligations requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest.
Key Suitability Factors Include:
- Client’s age and financial situation
- Investment objectives and time horizon
- Risk tolerance and investment experience
- Liquidity needs and tax status
- Overall investment portfolio balance
Morgan Stanley’s Track Record
Morgan Stanley is one of the largest financial institutions in the world, with an extensive network of brokers and advisers. While it has built a strong reputation over the years, the firm has also faced numerous complaints and legal actions related to its management of client accounts
The firm has faced criticism for supervisory failures, including SEC settlements related to inadequate oversight of broker activities.
What This Means for Affected Investors
If you were a client of Sean Righter and experienced significant losses, particularly in ARK Invest products or other concentrated investment strategies, you may have valid claims for recovery. The pattern of complaints and settlements suggests systemic issues with how investments were recommended and managed.
Signs You May Have a Valid Claim:
- Significant losses in ARK Invest or other speculative investments
- Portfolio concentration exceeding your risk tolerance
- Lack of proper risk disclosure or suitability assessment
- Investment strategies that didn’t match your stated objectives
Conclusion
The mounting evidence against Sean Righter reveals a troubling pattern of unsuitable investment practices that have cost clients millions of dollars. These two disclosure settlements add up to more than $1.5 million by themselves, a number that shows how much of an impact Sean Righter has had on his client’s portfolios.
For investors who suffered losses under Righter’s management, time may be limited to pursue recovery through FINRA arbitration or other legal remedies.
Take Action: Free Consultation Available
If you invested with Sean Righter and experienced losses, Haselkorn & Thibaut can help. Our experienced securities fraud attorneys have recovered millions for investors nationwide, and we work on a no recovery, no fee basis.
Call 1-888-885-7162 today for your free consultation.
Don’t let unsuitable investment practices cost you your financial future. Our team will review your case at no cost and help you understand your options for recovery. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has the expertise to fight for your rights as an investor.
Remember: FINRA arbitration claims have time limits. Don’t wait to protect your interests.
