Meyer Wilson represents investors who have suffered significant investment losses while working with Morgan Stanley broker and investment adviser Sean Righter. These complaints, coupled with Righter’s troubling history of customer disputes, have raised red flags about his investment practices. In this blog, we’ll examine Righter’s background, the nature of his disputes, a dive into his ARK Invest purchases, and Morgan Stanley’s track record in handling such cases.
At Meyer Wilson, we have a great deal of experience in handling cases of broker misconduct. We will give you a free consultation regarding your case and we work on a contingency-fee basis, meaning you owe no fees unless we win your case. If you have been affected by Sean Righter’s practices or another broker, reach out to us at Meyer Wilson.
Who Is Sean Righter?
Sean Righter (CRD#: 5419832) is a registered broker and investment adviser currently employed by Morgan Stanley (CRD#: 149777) at their Irvine, California office. According to his FINRA BrokerCheck report, Righter has been with Morgan Stanley since 2009 and is licensed in 24 U.S. states and territories. However, his professional record is marred by multiple significant customer disputes that resulted in sizable settlements. He has also allegedly sold ARK Invest ETFs that have lost customers their investments, a sign that there might be more to his history than is currently disclosed.
ARK Invest and Sean Righter’s Risky Recommendations
From July 2023 to July 2024, ARK Invest’s suite of ETFs experienced an accumulated loss of $22 billion, making it one of the most high-profile examples of market volatility of the year. Sean Righter allegedly concentrated his clients into ARK Invest products, despite their inherent risks. These investments were heavily concentrated in speculative sectors like technology and innovation, which are prone to significant market swings. Many investors likely saw substantial losses as a result of these recommendations.
If true, the promotion of such high-risk products contradicts the obligation for brokers to choose products that align with a client’s risk tolerance and financial goals. This pattern further highlights the need for greater scrutiny of Righter’s practices and the impact they have had on his clients’ financial well-being.
Sean Righter’s Other Customer Disclosures
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Disclosure 1: Unsuitable Investment Strategy (August 29, 2023)
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Allegations: The customer alleged that the investment strategy executed in their account was unsuitable, involving managed/wrap accounts and exchange-traded funds (ETFs).
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Outcome: This dispute was settled in October 2024 for $315,000, though Righter did not personally contribute to the settlement.
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Disclosure 2: Unsuitability in Equity Investments (March 17, 2023)
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Allegations: Customers alleged unsuitability in their accounts involving investments in equity-listed securities, including common and preferred stock.
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Outcome: The case settled in July 2024 for $1,200,000, with no personal contribution from Righter.
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These two disclosure settlements add up to more than $1.5 million by themselves, a number that shows how much of an impact Sean Righter has had on his client’s portfolios.
Understanding Suitability Violations
Suitability is a core principle of investment advising, requiring brokers to ensure that any recommendation aligns with the client’s financial needs, goals, and risk tolerance. When brokers violate this standard, it can lead to significant financial losses for investors. Unsuitability claims such as the settlements in these disputes suggest serious breaches of this obligation, raising questions about Righter’s practices and the broader oversight within Morgan Stanley.
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Morgan Stanley: A Firm Under Scrutiny
Morgan Stanley is one of the largest financial institutions in the world, with an extensive network of brokers and advisers. While it has built a strong reputation over the years, the firm has also faced numerous complaints and legal actions related to its management of client accounts and broker misconduct. A few notable examples include:
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Excessive Trading Allegations: Morgan Stanley has been accused of allowing brokers to engage in churning, a practice where excessive trading generates commissions for the broker but harms the client.
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Failure to Supervise: Regulatory investigations have repeatedly highlighted instances where Morgan Stanley failed to properly oversee its brokers, leading to misconduct.
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Unsuitable Recommendations: Similar to the allegations against Sean Righter, Morgan Stanley has faced multiple claims that its brokers made investment recommendations not suited to clients’ financial goals.
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SEC Settlements: The firm has paid significant fines to the Securities and Exchange Commission (SEC) for failing to protect investors, including a $5 million settlement in 2020 related to supervisory lapses.
A firm’s ability to prevent misconduct relies heavily on robust supervisory systems. Despite its resources, Morgan Stanley has been criticized for inadequate oversight, which has allowed brokers like Sean Righter to operate unchecked for extended periods.
Meyer Wilson Can Help You
The allegations and settlements tied to Sean Righter highlight the risks investors face when working with brokers who fail to uphold their fiduciary duties. At Meyer Wilson, we’re deeply committed to investigating cases like these and holding financial professionals accountable for their actions. Sean Righter’s history is a cautionary tale for investors, underscoring the importance of thoroughly vetting brokers by checking their history.
Our team at Meyer Wilson has a proven track record of success in holding brokers and firms accountable for their actions. If you have concerns about Sean Righter or any other broker, contact us today for a free consultation. Let us help you protect your financial future.
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Frequently Asked Questions
What should I do if I believe my broker engaged in unsuitable investments?
If you suspect misconduct, gather all relevant documentation, including account statements and communications with your broker. Contact Meyer Wilson to discuss your options.
What constitutes a suitability violation?
A suitability violation occurs when a broker’s investment recommendation does not align with the client’s financial situation, goals, or risk tolerance.
How do I check my broker’s background?
You can use FINRA’s BrokerCheck tool to review a broker’s employment history, qualifications, and any disclosed disputes or disciplinary actions.
Recovering Losses Caused by Investment Misconduct.