FINRA has barred former Morgan Stanley broker Matthew Singer for failing to appear for an on-the-record testimony during an investigation into allegations of unsuitable options trading recommendations.
After several customers filed complaints against Singer alleging Singer made unsuitable options recommendations, in 2016 FINRA commenced an investigation into the allegations. When FINRA requested that Singer appear for testimony in March 2018, he refused, violating FINRA rules. As a result, he was barred from acting as a broker.
According to FINRA, Singer was terminated from Morgan Stanley in March 2016 due to concerns regarding his conduct involving a client arbitration matter reviewed by the firm
During his time as a broker, Singer racked up three customer disputes alleging unauthorized trading, misrepresentation, unsuitable investments, and unsuitable options trading recommendations.
Options are contracts that grant the investor right to buy or sell stocks at a prenegotiated price by a specific date. Options trading can be an appropriate investment strategy for experienced investors with aggressive risk tolerances, and they can add flexibility to an investor's portfolio. Options trades can be simple, "one-legged" transactions, or they can be extremely complex. For inexperienced investors or those with low risk tolerances, the recommendation for more complex, high-risk options trading may be unsuitable.
Securities laws and FINRA rules require brokers like Matthew Singer to only recommend investment products and strategies that are suitable for their customers. Suitability is determined by the investor's age, risk tolerance, financial status, experience, investment objectives and needs. When brokers recommend unsuitable options trading, they are in violation of FINRA rules and they, and their brokerage firms, can be held liable for the financial losses that their customers incur.
If you lost money due to unsuitable options trading recommendations while working with Matthew Singer, Meyer Wilson would like to hear from you.