Former Morgan Stanley Smith Barney Rep Fined and Suspended by FINRA

The following information appeared on FINRA’s website under “Disciplinary and Other FINRA Actions, June, 2013.”

Darrah Lee Gleason (CRD #2442684, Registered Representative, Old Greenwich, Connecticut)

was fined $5,000 and suspended from association with any FINRA member in any capacity for one month. Without admitting or denying the allegations, Gleason consented to the described sanctions and to the entry of findings that she recommended an independent investment adviser to a customer of her firm contrary to her firm’s written policies and procedures, which prohibited its employees from soliciting for or recommending independent investment advisers without the firm’s approval. The firm offered its own platform of asset management and advisory services to its customers, and the firm pre-approved the investment advisers on this platform.

FINRA's findings stated Gleason sold the customer’s investments at the firm so that the proceeds could be transferred to an account the independent adviser managed. Although the customer approved the overall plan to sell her investments, Gleason did not have the customer’s express authorization for the trades but instead took instructions from the investment adviser, entering sell orders totaling approximately $3.1 million.

Gleason engaged in discretionary trading in the customer’s account without the customer’s prior written authorization to exercise discretion or to take third-party instructions, and without the firm’s approval. The customer executed a Discretionary Investment Management Agreement authorizing the investment adviser to purchase or sell securities on the customer’s behalf but that agreement did not cover Gleason or the firm, nor was it provided to Gleason or the firm.

Gleason failed to disclose to her firm that she had referred an investment adviser to the customer and that discretion was being exercised in the customer’s account at the investment adviser’s direction. The findings also included that Gleason did not disclose to her firm that she was seeking employment at the investment adviser while she was acting pursuant to the investment adviser’s instructions, so her firm was unable to fully supervise her in her role as the customer’s broker.
The suspension was in effect from April 15, 2013, through May 14, 2013.
(FINRA Case #2011026395801)

This broker was previously registered with FINRA at the following brokerage firms:

MORGAN STANLEY SMITH BARNEY
CRD# 149777
NEW YORK, NY
06/2009 - 09/2010

CITIGROUP GLOBAL MARKETS INC.
CRD# 7059
NEW YORK, NY
02/1994 - 06/2009

The information from FINRA's website ends here.

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