Haselkorn & Thibaut has opened an active, ongoing investigation into Eric Kleiner (CRD# 4135180), a former financial advisor who was permanently barred by FINRA in October 2025 after refusing to cooperate with regulators investigating allegations of unauthorized investment recommendations and conflicts of interest.
If you invested with Eric Kleiner at Morgan Stanley, Wells Fargo, or Prudential Securities and experienced unexpected losses—particularly in cannabis stocks like TerrAscend—you may be entitled to recover your investment losses. Call Haselkorn & Thibaut today for a free consultation: 1-888-885-7162
The Permanent FINRA Bar: What It Means
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On October 31, 2025, FINRA permanently barred Eric Kleiner from the securities industry. This wasn’t for the underlying misconduct allegations alone—it was because Kleiner refused to provide documents and testimony during FINRA’s investigation.
Let that sink in. When regulators came knocking to investigate serious allegations, Kleiner chose to end his 25-year career rather than cooperate.
A FINRA Rule 8210 bar is one of the most severe sanctions available. It’s permanent. It cannot be appealed through standard processes. And it sends a clear message: Kleiner is barred from ever working as a broker, dealer, or in any capacity with a FINRA member firm again.
Why would someone choose a permanent bar over cooperation? Typically, it means the evidence would be even more damaging than the bar itself. For investors, this raises serious questions about what Kleiner was hiding.
The Cannabis Stock Scheme That Started It All
The investigation that led to Kleiner’s bar began with his termination from Morgan Stanley in March 2025. According to Morgan Stanley’s official filing, Kleiner was fired for:
- Recommending non-firm approved and firm restricted investments
- Investing in the same securities he recommended to clients without disclosure
- Failing to disclose outside investments
- Using personal devices to share confidential firm information
At the center of these allegations? TerrAscend Corp., a cannabis stock that Morgan Stanley had specifically restricted as unsuitable for clients.
How the Alleged Scheme Worked
According to multiple investor complaints and legal filings, here’s what allegedly happened:
Step 1: Kleiner identified TerrAscend, a cannabis company, as a high-potential investment and personally invested in it.
Step 2: He recommended TerrAscend to clients, claiming federal cannabis regulation would dramatically boost its value and calling it “superior” to their existing holdings.
Step 3: When Morgan Stanley restricted TerrAscend due to unsuitability concerns, Kleiner allegedly advised clients to purchase it through external brokerage accounts to circumvent firm restrictions.
Step 4: He used personal devices—not monitored by Morgan Stanley—to communicate with clients about these unauthorized investments, evading firm supervision.
Step 5: TerrAscend stock collapsed 98% to approximately $0.28 per share. Even as clients watched their retirement savings evaporate, Kleiner allegedly urged them to “hold,” falsely assuring them the stock would recover.
One investor complaint filed by Erez Law PLLC details how a client and his elderly mother were advised to liquidate their entire Morgan Stanley retirement accounts to invest in TerrAscend. They lost nearly everything.
Why This Matters to You
This wasn’t just bad investment advice. This was “selling away”—a serious violation of securities regulations. When a broker recommends investments outside their firm’s approved list, several protections disappear:
- No firm due diligence on the investment’s suitability
- No firm supervision of the broker’s conduct
- Reduced liability if the investment fails
- Hidden conflicts of interest (like the broker’s personal stake)
Morgan Stanley restricted TerrAscend for good reason—it was too risky for most investors. By circumventing those restrictions, Kleiner allegedly put his own interests ahead of his clients’ financial security.
A 17-Year Pattern of Unsuitable Recommendations
The cannabis scheme wasn’t Kleiner’s first rodeo. His regulatory record reveals a troubling pattern spanning nearly two decades.
The 2010 Arbitration Award: A Warning Sign Ignored
In 2010, FINRA arbitrators awarded $90,000 plus interest to Claire and Alex Moskvin, a New Jersey couple who suffered devastating losses under Kleiner’s guidance while he was at Wells Fargo.
The Moskvins had $975,000 from selling their home. They told Kleiner they needed to preserve capital for 1-2 years to purchase a new home. They explicitly requested principal-insured municipal bonds or Treasuries.
Instead, Kleiner recommended aggressive mutual funds—primarily “C” shares with built-in 1% annual commissions. The account documentation listed their objective as “growth and income” rather than the “capital preservation” they had requested.
From May 2008 to March 2009, the account lost $226,865.86—nearly 23% of their nest egg. Throughout the losses, the Moskvins contacted Kleiner almost daily, and he repeatedly told them not to worry and that liquidating would be “foolish.”
Financial advisors who later analyzed the portfolio characterized it as “moderate to aggressive” requiring a minimum 5-year time horizon—completely unsuitable for the Moskvins’ 1-2 year need.
FINRA arbitrators agreed, finding Kleiner liable for fraud, misrepresentation, unsuitable investments, breach of fiduciary duty, and negligence.
Five Pending Arbitrations Filed in 2025
Within three months of Kleiner’s termination from Morgan Stanley, five separate FINRA arbitrations were filed against the firm, all alleging similar misconduct during Kleiner’s 2016-2025 tenure:
| Filing Date | Case Number | Allegations | Damages Sought |
|---|---|---|---|
| March 18, 2025 | 25-00550 | Unsuitable managed/wrap strategy | Unspecified |
| April 21, 2025 | 25-00807 | Unauthorized outside investment | Unspecified |
| April 25, 2025 | 25-00827 | Unauthorized investment strategy | Unspecified |
| May 8, 2025 | 25-00913 | Unauthorized outside investment | $400,000 |
| June 11, 2025 | 25-01202 | Outside investment recommendation | Unspecified |
The rapid clustering of complaints immediately following Kleiner’s termination suggests clients learned of his misconduct through Morgan Stanley’s notification and discovered they weren’t alone.
Red Flags Every Investor Should Know
If you were a client of Eric Kleiner, review your accounts for these warning signs:
🚩 Cannabis-Related Investments
- TerrAscend Corp. (TRSSF)
- Cannabis ETFs or other cannabis securities
- Especially if purchased in accounts outside Morgan Stanley
🚩 Communications via Personal Devices
- Investment discussions via Kleiner’s personal email
- Text messages or WhatsApp conversations about investments
- Requests to communicate “off the record”
🚩 External Account Recommendations
- Suggestions to open accounts at other brokerages
- Investments Kleiner said were “between us” or “off the grid”
- Private placements or restricted securities
🚩 Unsuitable Investment Strategies
- High-risk investments despite conservative objectives
- Aggressive growth strategies despite retirement age
- Concentrated positions in speculative sectors
- Illiquid investments despite short time horizons
🚩 Mismatched Documentation
- Account forms showing different objectives than you stated
- Risk tolerance levels that seem too high
- Documents you don’t remember signing
🚩 Undisclosed Conflicts
- Did Kleiner mention he personally owned investments he recommended?
- Did he seem overly enthusiastic about specific securities?
- Did he discourage selling even as losses mounted?
Why Elderly and Conservative Investors Were Targeted
Several complaints specifically note that Kleiner recommended unsuitable investments to elderly investors and those with conservative risk profiles.
The 2023 cannabis securities complaint explicitly stated the investments were inappropriate for the client’s age. The Erez Law case involved a client’s elderly mother who lost retirement savings in TerrAscend.
Elderly investors typically need capital preservation and income—not high-risk speculation on cannabis stocks. Yet Kleiner allegedly pushed these investments on the very people who could least afford to lose.
This pattern suggests Kleiner exploited trust relationships and targeted vulnerable investors who were less likely to question his recommendations.
Morgan Stanley’s Potential Liability
Even though Kleiner engaged in unauthorized activities, Morgan Stanley may still be liable for failure to supervise.
Firms are required to monitor broker communications and detect patterns of misconduct. Questions Morgan Stanley must answer include:
- Did the firm have adequate systems to detect Kleiner’s use of personal devices?
- Should the firm have detected patterns of unauthorized recommendations?
- Was the 2023 cannabis complaint properly investigated?
- Were there other red flags that should have triggered heightened supervision?
Under the legal doctrine of respondeat superior, firms can be held liable for acts of employees within the scope of employment—even unauthorized acts if supervision was inadequate.
Time Is Running Out: Statute of Limitations
If you suffered losses due to Eric Kleiner’s alleged misconduct, you must act quickly. FINRA arbitration claims are generally subject to a 6-year statute of limitations from the occurrence or 2 years from discovery.
Evidence disappears over time. Memories fade. Witnesses become unavailable. The longer you wait, the harder it becomes to recover your losses.
What You Can Do Right Now
Step 1: Check Your BrokerCheck Record
Visit FINRA BrokerCheck and search for Eric Kleiner (CRD# 4135180) to review his complete regulatory history, including all complaints and the permanent bar.
Step 2: Gather Your Documentation
Collect:
- Account statements showing investments and losses
- Communications with Kleiner (emails, texts, letters)
- New account opening documents
- Notes from meetings or phone calls
Step 3: Contact Haselkorn & Thibaut for a Free Consultation
Haselkorn & Thibaut has opened an active investigation into Eric Kleiner. Our experienced securities attorneys work on a contingency fee basis—you pay nothing unless we recover money for you.
We’ve helped countless investors recover losses from broker misconduct. We understand the complex securities regulations Kleiner allegedly violated, and we know how to hold brokers and firms accountable.
Don’t wait. Call us today: 1-888-885-7162
Understanding Your Legal Rights
Investors who suffered losses due to Kleiner’s alleged misconduct may have claims for:
Breach of Fiduciary Duty: Investment advisers must act in clients’ best interests. Recommending unsuitable investments violates this fundamental duty.
Fraud and Misrepresentation: Making false statements about investment prospects or failing to disclose conflicts of interest constitutes fraud.
Unsuitable Recommendations: FINRA Rule 2111 requires brokers to have a reasonable basis to believe recommended investments are suitable for the customer.
“Selling Away” Violations: FINRA Rules 3270 and 3280 prohibit brokers from participating in private securities transactions without firm knowledge and approval.
Violation of Regulation Best Interest: Since June 2020, SEC Regulation Best Interest requires brokers to act in customers’ best interests and disclose conflicts of interest.
The Bottom Line
Eric Kleiner’s permanent FINRA bar, termination from Morgan Stanley, and pattern of complaints spanning 17 years paint a clear picture: investors were harmed by unsuitable recommendations, undisclosed conflicts of interest, and unauthorized investment schemes.
The five pending arbitrations filed in 2025 suggest multiple victims are seeking justice. If you invested with Kleiner and experienced unexpected losses—particularly in cannabis stocks, aggressive growth strategies, or investments purchased outside your main brokerage account—you may be entitled to recover your losses.
Haselkorn & Thibaut is actively investigating Eric Kleiner. We offer free consultations and work on contingency—you pay nothing unless we win.
Call us today: 1-888-885-7162
Don’t let the statute of limitations run out. Your financial future may depend on taking action now.
