A Financial Industry Regulatory Authority (FINRA) arbitration panel is forcing Jeffrey Hunter Smith, a former broker with Morgan Stanley, to pay the firm back over $480,000. Morgan Stanley won damages, interest and legal fees from Smith over promissory note and back-end agreement breaches. Smith was barred from the industry by FINRA four months before the panel’s decision. According to his Letter of Acceptance, Waiver and Consent (AWC), he took $300,000 in loans from Morgan Stanley clients without getting the firm’s required permission or disclosing it. The panel found that not only did Smith violate loan rules, but he violated “high standards of commercial honor and just and equitable principles of trade.” In addition to Morgan Stanley’s victory over Smith, the bank also clawed back over $406,000 in damages, interest and legal fees from former broker Beverly B. Carroll and over $118,000 in damages, interest and legal fees from former broker Brian Richardson Castillo. Both cases had to do with unpaid promissory notes.
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