A stock brokerage firm agrees to pay back millions to investors in a settlement with the Mississippi Secretary of State's Office.
Beginning in 2012 clients complained of losing millions of dollars at the Ridgeland branch of Morgan Stanley. Secretary of State Delbert Hosemann investigated the office. He found a former financial advisor made risky and aggressive investments without the customers' knowledge or understanding.
"He had told people that he would follow a portfolio that was risk averse for example, and in fact it was churning going on here, multiple high risk securities were being bought and sold, and some outside of the normal brokerage house arrangement," said Hosemann.
Hosemann says 194 Mississippians lost large sums of money. He charged Morgan Stanley with failure to supervise the financial advisor. The company agreed to a $4.7 million settlement without admitting or denying the allegations. The agreement includes investigative costs, a fine and a $4.2 million customer fund at Trustmark Bank, to pay back some of the losses. New Orleans Attorney Joe Peiffer is representing a 72-year old Brandon woman who lost $300,000. He says they're going to trial.
"That $300,000 was earmarked to take care of her daughter, who has cerebral palsy, after she passes away. Twenty percent doesn't do her daughter any good. It doesn't help her. We need to get a full recovery for my client," said Peiffer.
Secretary of State Delbert Hosemann says customers who take the settlement release the company from future claims. Morgan Stanley said in a statement they have cooperated with the investigation and they take their responsibility to their clients seriously.