Daniel Fusco, a broker and investment advisor associated with Morgan Stanley (CRD 149777) in Florida, is facing a pending customer dispute allegation, as reported on his FINRA BrokerCheck (CRD #5829033). The allegation, filed by the executrix of an estate, raises concerns about Fusco’s supervision of a deceased client’s account, particularly regarding the margin balance maintained during the settlement of the estate from 2016 to 2023.
The complaint, which involves equity listed securities (common and preferred stock), is currently pending resolution. The damage amount requested in the dispute is $500,000, highlighting the severity of the allegations against Fusco and Morgan Stanley. Investment fraud and bad advice from financial advisors can have devastating consequences for investors, leading to significant financial losses and emotional distress.
Understanding the Allegation and FINRA Rules
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The core of the complaint revolves around the alleged failure of Daniel Fusco to properly supervise the margin balance in a deceased client’s account during the estate settlement process. Margin accounts allow investors to borrow money from their brokerage firm to purchase securities, using the account’s investments as collateral. However, this leverage also amplifies the potential for losses.
FINRA Rule 2090 (Know Your Customer) and Rule 2111 (Suitability) require brokers to have a reasonable basis for believing that their recommendations are suitable for their clients, taking into account factors such as the client’s financial situation, risk tolerance, and investment objectives. Additionally, FINRA Rule 3110 (Supervision) obligates firms to establish and maintain a system to supervise the activities of their associated persons, ensuring compliance with securities laws and regulations.
The Importance for Investors
This case underscores the critical role of proper supervision in protecting investors’ interests, especially in sensitive situations like estate settlements. Investors rely on their financial advisors to manage their accounts with the utmost care and diligence, adhering to FINRA rules and prioritizing their clients’ best interests.
Improper supervision of margin balances can expose investors to excessive risk, potentially leading to significant losses. As such, investors should remain vigilant and regularly review their account statements, questioning any discrepancies or unusual activity.
Red Flags and Recovering Losses
Investors should be aware of potential red flags that may indicate financial advisor malpractice, such as:
- Unauthorized trades or excessive trading activity
- Inadequate communication or lack of transparency
- Unsuitable investment recommendations
If investors suspect misconduct or have suffered losses due to improper supervision or other forms of malpractice, they may have the right to pursue recovery through FINRA arbitration. This process allows investors to seek compensation for damages caused by their financial advisor’s wrongdoing.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Daniel Fusco and Morgan Stanley in relation to this pending complaint. 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.
Investors who have worked with Daniel Fusco or Morgan Stanley and believe they may have been affected by improper supervision or other forms of misconduct are encouraged to contact Haselkorn & Thibaut for a free consultation. The firm operates on a “No Recovery, No Fee” basis, ensuring that clients can seek justice without upfront costs. To discuss your case with an experienced investment fraud attorney, call Haselkorn & Thibaut at 1-888-885-7162 .
