According to a settlement issued by the Financial Industry Regulatory Authority (FINRA), a former Morgan Stanley advisor has agreed to a one-month suspension and a $2,500 fine for allegedly taking credit for trades that should have been shared with the estate of a former advisor.
Richard F. Spettel has agreed to the sanctions without admitting or denying the allegations. According to FINRA, between 2015 and 2020, Spettell changed the account code on 110 trades to take sole credit for trades on inherited accounts. According to FINRA, Spettel "mistakenly assumed" that he had permission based on his "understanding of a prior informal agreement" that he had made with the former advisor. However, Spettell did not confirm with the former advisor's estate that his understanding was correct or that he could change the representative code for the transactions.
Spettell's actions violated FINRA's Rule 4511, which requires firms and registered reps to preserve accurate books and records. Spettell also violated FINRA's catch-all Rule 2010, requiring advisors to observe high standards of commercial honor. FINRA has imposed sanctions similar to penalties in multiple previous cases. The regulatory body has investigated account coding issues at Morgan Stanley since 2020, prompted by a complaint from a retired advisor. As a result, over two dozen advisors have been terminated by the company, according to AdvisorHub.
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