Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP have been investigating Morgan Stanley broker Barry Garapedian (Garapedian). According to BrokerCheck Records, Garapedian has been subject to 14 customer disputes, two of which are still pending. The majority of these disputes concern unsuitable investment recommendations.
Most recently, in April 2018, a customer alleged that Garapedian recommended investments that were unsuitable and over-concentrated the customers funds into the investments. The customer also alleged that the account had excessive fees. The customer has requested $713,000 in damages. This dispute is currently still pending.
In March 2018, another customer similarly alleged that from 2013 to 2015, Garapedian was recommending unsuitable investments that didn’t align with the customer’s needs and goals. This dispute is currently still pending.
In March 2018, a customer alleged that from March 2013 to December 2017, Garapedian was recommending unsuitable investments that didn’t align with the customer’s investment objectives. The customer requested $106,178 in damages.
In March 2008, a customer alleged that Garapedian’s recommendation of Auction Rate Securities (ARS) was unsuitable to the customer’s investment needs and falsely represented. The case was settled at $125,000.
Auction Rate Securities are debt securities sold through a dutch auction at an interest rate that will clear the market at the lowest possible yield in order to ensure that all bidders receive the same yield. Since 2008, most auctions have failed and the market has largely collapsed – leaving many investors with illiquid investments that have long-term maturities.
All advisers are obligated to make suitable investment recommendations for their clients by following certain criteria. For an investment recommendation to be suitable, the broker must have first have a reasonable basis for recommending the security/product based off the broker’s research of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs. Investment objectives and needs include the clients net worth, life savings, age, investor experience, and so on.
Garapedian’s record shows an unusual amount of complaints in comparison to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. However, studies have found that in certain parts of California, New York or Florida, the rates of disclosure go up to as high as 18%. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.
Garapedian entered the securities industry in 1982 and has been registered with Morgan Stanley since June 2009. From March 1993 to June 2009, Garapedian was registered with Citigroup Global Markets Inc. From April 1988 to July 1993, Garapedian was registered with Lehman Brothers Inc. From March 1982 to April 1988, Garapedian was registered with E. F. Hutton & Company Inc.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of unsuitable investments and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover