Securities Lawyer Blog | Victim of Fraud?

TAG | MSSB

Sep/12

18

Lawsuit Alledges Harvey Kadden, a Top Broker at MSSB, is Churning Customer Accounts

Comments off · Posted by Securities Lawyer in FINRA

Clifford Jagodzinski, formerly of Morgan Stanley Smith Barney LLC (MSSB), claims he was fired for blowing the whistle on one of the firm’s newest wealth managers, Harvey Kadden. According to the complaint, filed in U.S. District Court in the Southern District of New York, Kadden “was flipping preferred securities in a manner that was generating tens of thousands of dollars in commissions but causing losses or minimal gains for his clients and exposing (them) to unnecessary risks.”

Harvey Kadden, who was with Merrill Lynch for 30 years, listed regularly on the Barron’s Top 1,000 advisers list, joined MSSB October, 2011. According to the lawsuit, he received a $25 million guarantee for signing on.

“Consequently, [MSSB] had very significant earnings expectations for Harvey Kadden and did not want to take any steps to jeopardize his book of business,” the complaint alleges. Mr. Jagodzinski was thus “told to stop investigating Mr. Kadden,” according to the complaint.

The Dodd-Frank Act prohibits retaliation against whistle-blowers, according to the complaint filed by Mr. Jagodzinski.

Harvey Kadden manages assets in excess of $1 billion.

MSSB acknowledged that Mr. Jagodzinski was asked to investigate certain trades in customer accounts served by Harvey Kadden’s team and that he had discussed those trades with his superiors. The firm, however, denied the other allegations.

From December 2011 to April, when he was fired, Mr. Jagodzinski reported several violations by brokers. They included improper trades of Treasuries by another MSSB employee, the failure of some of the firm’s brokers to register home offices as alternate work locations and drug abuse by one of the firm’s brokers.

“Finally, during a conversation during the week of April 4, Mr. Jagodzinski told Mr. Turetzky (his superior) that these violations should be reported” to the Financial Industry Regulatory Authority Inc., according to the complaint. “Mr. Turetzky bristled at this declaration, and less than 10 days later, Mr. Jagodzinski was fired.”

If you were a client of Harvey Kadden of MSSB, or another broker who may have been churning your accounts, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website and complete our online form at: http://www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Sep/11

9

Soreide Law Group Wins FINRA Award in Favor of Heirs Recovering 100% Against Morgan Stanley Smith Barney

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, was notified by FINRA today that the clients they represented against Morgan Stanley Smith Barney, LLC (“MSSB”)  were awarded 100% of compensatory damages, in addition to expert fees, pre-judgment interest, and costs.
 
In a published FINRA award, case number 10-02604, Attorney Lars Soreide, recovered for his clients, who were the heirs and trustees to their late father’s estate, 100% of the damages caused by MSSB for not allowing their clients to roll over their late father’s minimum distribution back into his 401K which resulted in unnecessary tax consequences.  This case offers precedential value for future FINRA arbitrations that relate to unnecessary tax consequences incurred by brokerage firm’s negligent or non compliant policies or procedures that result in unnecessary tax consequences to their clients.
 
The Claimants, who were acting in their capacities as trustees, were improperly barred from rolling over their late father’s IRA distribution. The Claimants argued that a trustee upon death, steps into the shoes of the decedent, and can do for the decedent everything the decedent could have done if alive.  As authority for this proposition, Claimant’s attorney Lars Soreide, cited Gunther v. United States, 573 F. Supp. 126 – United States District Court, W.D. Michigan (1982).  Claimants’ expert witness was Gary Sellari of Divine Blaclock Martin and Sellari and all expert witness fees were awarded back to Claimants in addition to pre-judgment interest dating back to Nov., 2009.
 
For more information on Lars Soreide, Soreide Law Group, PLLC, this case, or other securities related claims please visit http://www.securitieslawyer.com or call 888-760-6552. Soreide Law Group, PLLC, representing investors nationwide.

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