Laura Casey, a former Morgan Stanley financial advisor, faced regulatory action from FINRA. The Financial Industry Regulatory Authority fined Casey $7,500 and imposed a seven-month suspension.
This penalty came after Casey’s departure from Morgan Stanley. Following her resignation, she joined Capitol Securities Management. Casey’s registration at Capitol Securities ended in September last year.
She has since moved to Coastal Wealth Management as an investment advisor.
FINRA’s actions against Casey highlight the regulatory body’s focus on compliance in the financial industry. The fine and suspension serve as a reminder of the consequences for violating industry rules.
Haselkorn & Thibaut is currently investigating Laura Casey and Morgan Stanley. Investors can call us at 1-888-885-7162 for a free consultation.
Casey’s career moves after leaving Morgan Stanley demonstrate the impact of regulatory actions on financial professionals’ employment opportunities.
Violations of Regulation Best Interest
Table of Contents
Laura Casey faced serious allegations of violating Regulation Best Interest. She allegedly failed to prioritize her clients’ interests in her investment recommendations.
Allegations of not acting in clients’ best interest
Laura Casey, a former Morgan Stanley financial advisor, faced serious allegations of failing to act in her clients’ best interests. FINRA accused Casey of violating Regulation Best Interest by purchasing products with upfront sales charges in brokerage accounts instead of advisory accounts.
This breach of fiduciary duty resulted in four customers incurring $37,757.54 in unnecessary fees between March and July 2022.
My experience as a financial compliance officer has shown that such violations often stem from prioritizing personal gain over client welfare. In Casey’s case, although she didn’t earn commissions on these trades, her actions demonstrated a clear disregard for regulatory compliance and appropriate product selection.
Morgan Stanley ultimately reversed the trades to protect their clients, but the incident highlights the importance of advisors maintaining a duty of loyalty and making suitable investment recommendations.
Purchase of products with upfront sales charges
Building on the allegations of not acting in clients’ best interest, Laura Casey’s purchase of products with upfront sales charges became a focal point of the FINRA investigation. Casey bought exchange-traded funds and other products that carried initial sales fees for her clients.
These purchases were made in non-advisory accounts, resulting in unnecessary costs for customers.
The improper transactions led to approximately $37,750 in unwarranted sales charges. Morgan Stanley identified this conduct and took swift action to reverse the trades. As a result, customers avoided incurring these fees.
This situation highlights the importance of adhering to Regulation Best Interest and prioritizing client welfare.
Financial advisors must always put their clients’ interests first. Purchasing products with upfront sales charges in non-advisory accounts goes against this fundamental principle, stated a FINRA spokesperson.
Selling products without prior authorization
Laura Casey, a former Morgan Stanley financial advisor, engaged in unauthorized trading in customer accounts. She executed 46 trades without obtaining prior written authorization from clients.
These transactions occurred in at least seven brokerage accounts between March and July 2022. Casey’s actions violated Regulation Best Interest, as she failed to act in her clients’ best interests.
Casey’s unauthorized trades resulted in significant financial consequences for her customers. Four clients incurred $37,757.54 in unnecessary charges due to these unauthorized transactions.
Morgan Stanley ultimately reversed these trades to rectify the situation. This case highlights the importance of adhering to securities regulations and obtaining proper client authorization before executing trades in brokerage accounts.
Consequences of Violations
FINRA’s investigation uncovered serious consequences for Laura Casey’s actions. Her clients faced unnecessary costs, while Morgan Stanley had to reverse trades to rectify the situation.
Unnecessary sales charges incurred by customers
Laura Casey’s actions at Morgan Stanley led to $37,757.54 in unjustified billing for four customers. These unwarranted expenses resulted from buying and selling products within days, triggering excessive fees.
I’ve seen firsthand how such practices can quickly erode client trust and portfolio value.
Fortunately, Morgan Stanley stepped in to reverse the trades, ensuring customers didn’t bear the brunt of these overbearing costs. The firm’s swift action prevented long-term financial harm to clients.
Casey’s conduct, occurring between March and July 2022, yielded no commissions for her but raised serious regulatory concerns.
Reversal of trades by Morgan Stanley
Morgan Stanley took swift action to protect its customers from unnecessary charges. The firm identified and reversed trades executed by Laura Casey between March and July 2022. This decisive move saved clients $37,757.54 in potential sales charges.
Morgan Stanley’s prompt response showcased its commitment to customer protection and regulatory compliance.
The trade reversals had significant impacts. Casey didn’t earn commissions on these transactions, aligning her interests with those of her clients. Morgan Stanley’s quick reversal process prevented financial harm to customers and demonstrated the firm’s proactive approach to addressing misconduct.
This incident highlights the importance of vigilant oversight in financial advisory services. The next section will explore the broader regulatory actions taken by FINRA in response to such violations.
Agreement to suspension and fine by Casey
Following Morgan Stanley’s trade reversals, Laura Casey faced consequences for her actions. Casey agreed to a settlement with FINRA, accepting a seven-month suspension and a $7,500 fine.
This penalty resulted from alleged violations of Regulation Best Interest between March and July 2022. The settlement addressed concerns about Casey’s conduct without requiring her to admit or deny the allegations.
Casey’s agreement to the suspension and fine marked a significant development in the case. FINRA’s enforcement action highlighted the regulatory body’s focus on upholding Regulation Best Interest standards within the financial industry.
The settlement served as a resolution to the allegations against Casey, allowing both parties to move forward without further legal proceedings.
Career Moves
Laura Casey moved to Capitol Securities Management after leaving Morgan Stanley. Want to know more about her career moves and the FINRA violations? Keep reading.
Registration at Capitol Securities Management
Laura Casey registered at Capitol Securities Management in August 2022, marking a new chapter in her financial services career. Her tenure at the firm lasted approximately one year, with her registration ending in September 2023.
This period at Capitol Securities Management followed Casey’s previous professional conduct issues and preceded her move to Coastal Wealth Management as an investment advisor.
Casey’s registration at Capitol Securities Management represented a brief stint in her investment management career. The conduct that led to her FINRA violations occurred prior to this role.
After leaving Capitol Securities Management, Casey transitioned to Coastal Wealth Management, continuing her work in the financial industry despite her regulatory history.
Move to Coastal Wealth Management
Laura Casey’s career trajectory in the financial services industry took a new turn after her departure from Morgan Stanley. She initially registered with Capitol Securities Management following her resignation from Morgan Stanley in September 2022.
Subsequently, Casey made another career move, joining Coastal Wealth Management as an investment advisor. This transition occurred after September 2023, marking her latest professional role in the wealth management sector.
Casey’s move to Coastal Wealth Management represents a significant shift in her career path within the financial industry. Her new position as an investment advisor at Coastal Wealth Management follows a period of regulatory scrutiny regarding her conduct at Morgan Stanley.
This career change highlights the ongoing professional transitions within the investment advisory landscape. The next section will delve into the regulatory actions taken by FINRA in response to Casey’s alleged violations.
Regulatory Actions by FINRA
FINRA has stepped up its enforcement of Regulation Best Interest violations. Want to know more about FINRA’s latest actions? Keep reading!
Focus on violations of Regulation Best Interest
Financial industry oversight has intensified, with FINRA prioritizing enforcement of Regulation Best Interest (Reg BI). This rule requires broker-dealers to act in their clients’ best interests when recommending securities transactions.
Laura Casey’s case exemplifies FINRA’s commitment to Reg BI enforcement. The ex-Morgan Stanley advisor faced sanctions for violating this regulation between March and July 2022, resulting in $37,757.54 of unnecessary sales charges for customers.
FINRA’s actions against Casey demonstrate its dedication to protecting investors and maintaining high standards in the securities industry. The regulatory body imposed a $7,500 fine and a seven-month suspension on Casey for her Reg BI violations.
This enforcement action serves as a stark reminder to financial advisors about the importance of compliance with customer protection rules and investment suitability standards. As someone who has worked in the industry, I can attest to the increased scrutiny and emphasis on Reg BI compliance in recent years.
Commitment to prioritize Reg BI enforcement
FINRA has intensified its focus on enforcing Regulation Best Interest (Reg BI) over the past two years. Bill St. Louis, FINRA’s chief of enforcement, has emphasized the organization’s commitment to prioritizing Reg BI compliance.
This regulatory oversight aims to ensure brokers adhere to conduct standards set by the SEC’s Regulation Best Interest.
FINRA’s disciplinary actions now consistently include Reg BI violations, as seen in Laura Casey’s case. The regulatory body continues to hold brokers accountable for their actions, enforcing compliance with Reg BI standards.
This ongoing effort demonstrates FINRA’s dedication to maintaining ethical practices within the financial industry and protecting investors’ interests.
Conclusion
Laura Casey’s case highlights FINRA’s commitment to enforcing Regulation Best Interest. Financial advisors must prioritize client interests and adhere to regulatory guidelines. This incident serves as a reminder for professionals to maintain ethical practices in their dealings.
Investors should remain vigilant and understand their rights when working with financial advisors. Casey’s suspension and fine underscore the serious consequences of violating securities regulations.
