Sales Associate Barred for Life for Gaming Morgan Stanley Fee-Reversal Process
A former Morgan Stanley sales associate at a Brea, Calif., branch accepted a lifetime ban from the industry for rebating herself with unwarranted fee reversals over two years at the firm, the Financial Industry Regulatory Authority said this week.
Alejandra Valenzuela allegedly stole $3,725 by entering a service fee reversal request multiple times between mid-2012 and mid-2014 and having the money credited to her personal Morgan Stanley account, according to a letter of acceptance, waiver and consent posted on the regulator’s website on Wednesday.
“Although Morgan Stanley permitted fee reversals for certain fees, Valenzuela improperly credited her account multiple times for the same service fee…by repeatedly entering fee reversal requests into an automated Morgan Stanley’s [sic] system, even though the original fee had already been reversed and Valenzuela already had received a credit into her account,” the consent letter said.
While Valenzuela’s penalty appears steep, it comes at a time when regulators and firms are under scrutiny for allowing registered individuals with histories of violations to remain in the securities industry.
Valenzuela actually registered with another firm’s branch in Beverly Hills as a general securities representative less than one month after her termination from Morgan Stanley in May, 2014, according to the consent letter. The second firm, Raymond James & Associates, fired her in December of 2015 after learning that Finra earlier in the month was investigating the circumstances of her termination by Morgan Stanley, according to Valenzuela’s record in Finra’s BrokerCheck database.
The settlement did not mention how Morgan Stanley uncovered the alleged violations, and a Morgan Stanley spokeswoman declined to comment.
Valenzuela, who could not immediately be reached for comment, accepted the charges without admitting or denying the findings. Her attorney, Scott E. Rahn in Los Angeles, declined to comment.
A spokeswoman for Raymond James, which was not named in the consent letter, did not immediately return a request for comment.
In August, 2016, Finra barred another client associate, Terry Pickering Lobelsky from the securities industry after she admitting to having stole $136,000 from clients at Morgan Stanley and UBS Financial Services between 2011 and 2013. She was sentenced in June to two years of home detention, five years of probation, 300 hours of community service and the return of $248,797 in restitution and interest costs.