William Patrick Lentell, a former broker employed by Purchase, New York-based Morgan Stanley Smith Barney, submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he improperly accepted loans totaling $316,000 from customers of his firm. The findings stated that the terms of the loan arrangements, except for a loan with one customer, were not in writing. To date, Mr. Lentell has failed to repay $52,000 of the $316,000 to the customers. The findings also stated that while none of the customers complained about the loan arrangements, Mr. Lentell did not notify his firm or receive its approval before entering into the loan arrangements. Since none of the customers were Mr. Lentell's immediate family members, the firm's procedures prohibited him from accepting such loans. The findings also included that in compliance questionnaires Mr. Lentell completed over three years, he falsely misrepresented to his firm that he had not borrowed money from any firm customers. Mr. Lentell, of Cotuit, Massachusetts, was barred from association with any FINRA member in any capacity.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses due to unauthorized loan arrangements with their broker can bring forth claims to recover damages against broker-dealers like Morgan Stanley Smith Barney, which should consistently oversee its brokers' activities in order to prevent the above-described prohibited conduct.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.