Miami, FL Morgan Stanley Broker Barred After Failing to Provide Information to FINRA
Scott J. Donato (CRD#: 2336331) is a former securities broker and registered investment advisor (RIA). He has been licensed for 23 years. From 2009 to 2017, Mr. Donato was employed as a representative of Morgan Stanley, where he was based at a branch office in Miami, Florida.
As of March 14th, 2019, Mr. Donato has been barred from the securities industry in all capacities. FINRA took this enforcement action after this broker failed to respond to an official request for information. Notably, Mr. Donato was subject to two complaints from Morgan Stanley customers in 2017, both alleging that he made unsuitable investment recommendations.
Allegations of Broker Misconduct: Former Morgan Stanley Financial Advisor Scott J. Donato
Under securities industry rules, registered representatives have a professional obligation to provide information, records, and/or testimony to the Financial Industry Regulatory Authority (FINRA) when it is requested and pursuant to the agency’s by-laws. When financial advisors fail to cooperate with regulatory investigation, it makes it more challenging for investors to protect their rights and interests. The failure to comply with FINRA rules can lead to enforcement action. In this case, FINRA barred former Morgan Stanley broker Scott J. Donato after he failed to respond to a previous notice of proposed suspension.
Investor Complaints: Unsuitable Investment Recommendations
In 2017, two investors filed complaints against broker Scott J. Donato. In March of 2017, an investor bought a claim alleging that Mr. Donato offered unsuitable investment advice between 2010 and 2013. During this time, Mr. Donato was employed at Morgan Stanley in Miami, Florida. This investor complaint was eventually settled for $995,000 in financial compensation. In November of 2017, a second investor filed a complaint against Mr. Donato also alleging unsuitable investments. In this case, the misconduct occurred between 2010 and 2017. According to BrokerCheck, this complaint was eventually settled for $150,000 in financial compensation.
Brokers must offer investment guidance that is appropriate for their customer. Indeed, the suitability requirement, FINRA Rule 2111, is one of the key investor protections regulations in the securities industry. Registered brokers have an affirmative duty to ensure that they are providing investment guidance that is consistent with the needs, risk tolerance, and overall investment objectives of their customer.
When brokers recommended investment strategies or sell financial products that that are too risky for their customers — in other words, they promote investments that are ‘unsuitable’ — they can potentially be held legally responsible for any resulting investment losses. Investors who have lost money due to unsuitable investments should speak to a securities fraud lawyer right away.
Contact a Unsuitable Investment Attorney in Miami, Florida
At Carlson & Associates, P.A., our Miami unsuitable investment lawyers offer effective and sophisticated legal representation to investors. If you or your family member sustained significant losses due to a broker’s unsuitable investment guidance, we are here to help. To learn more about what our FINRA arbitration lawyers can do for you, please call us at our Miami law office today.
Resource:
brokercheck.finra.org/individual/summary/2336331
