Posted in: Greedy Brokers |
A broker for Morgan Stanley has been disbarred by FINRA after misleading more than 90 former Xerox Corp. employees about their retirement investments.
According to FINRA’s disciplinary report, David Michael Isabella obtained confidential information about Xerox employees from the company’s human resources in exchange for gifts—phone cards, dinners, and tickets to sporting events. He would then single out employees who were nearing retirement, and pitch them an unrealistic return of over 10%. Some of those employees even made their retirement decisions based on Isabella’s projected returns.
Morgan Stanley fired Isabella after it was forced to pay over $7.2 million in fines and restitution. FINRA in its decision said Isabella was to be disbarred for soliciting and mishandling IRA rollover retirement accounts that were unsuitable for those customers, since he recommended those products without any regard to individual investors.
Many of these stories have come to light over the past few years, and at least they may help the next investor who is about to be defrauded by a financial advisor.
Investors, regardless of age or financial situation, should be wary of any guaranteed returns that do not come with enhanced risk. Like most bad brokers, Isabella apparently used information about Xerox’ employees to ultimately make them feel safe about unsafe investments.
Retirees, or others nearing retirement are at risk for broker fraud because they may be under pressure to increase their portfolios in a shorter span of time.
