By CNBC
A former Morgan Stanley financial advisor has been sentenced to more than seven years in prison after admitting he ran a $7 million Ponzi scheme at the firm for more than a decade.
But even though the scam targeted Morgan Stanley clients and the advisor admitted using a Morgan Stanley product to carry it out, the firm has fought efforts to hold it responsible.
Victims say not only has Morgan Stanley resisted their efforts to recover money from the firm, it is also continuing to hold them responsible for lines of credit that the advisor fraudulently convinced them to open. Morgan Stanley is America’s sixth-largest brokerage firm, with more than $1.3 trillion under management. The firm made $11 billion in profits last year.
“I can liken the whole process to being assaulted in a back alley while you’re on mind-altering drugs like roofies,” said Caitlin Andrews, 43, of Carolina Beach, North Carolina, a single mother of two boys who lost $1.7 million, or virtually her entire net worth. “And then one day you wake up in the police station and you have to watch the video again and again and go over bank statements of when things happened and listen to phone calls again and again. It’s traumatizing.”
“It’s always advisable to hire a financial advisor who owes their customer a fiduciary responsibility.”
-Shruti Gurudanti, Rose Law Group partner and director of corporate law
