What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: October 23, 2017

If you or someone you know invested money with Richard Shotz, a former broker with Morgan Stanley, you may be able to recover your investment losses on a contingency fee basis in the Financial Industry Regulatory Authority (FINRA). According to a Letter of Acceptance, Waiver and Consent (AWC) with FINRA, Mr. Shotz was accused of engaging in an unsuitable pattern of short-term trading of unit investment trusts (UITs) in 486 customer accounts. Shotz allegedly repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. The majority of them had maturity dates of at least 24 months and carried sales charges. Shotz continually recommended that his customers sell their UIT positions less than a year after purchase. The average holding period for these was 143 days. On 1,200 occasions, Shotz recommended that his customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. For this, he was suspended from the industry for four months and fined $7,500.

A broker must take into account a customer’s age, net worth, investment objectives and investment risk tolerance before recommending or selling an investment and must do his due diligence on the product. If he does not, his brokerage firm may be liable for losses on a contingency fee basis. UITs are not suitable for every customer because they can be illiquid and risky investments. You may be able to bring a claim against Morgan Stanley for not reasonably supervising its brokers.

Richard Shotz was previously registered with Raymond James in St. Petersburg, Florida from July 1987 until February 1994, Citigroup Global Markets in Ormond Beach, Florida from February 1994 until September 2008, Morgan Stanley & Co. Inc. in Ormond Beach from August 2008 until June 2009 and Morgan Stanley in Ormond Beach from June 2009 until October 2015. He is currently registered with Wells Fargo in Daytona Beach, Florida and has been since October 2015. He has five customer disputes against him, alleging misrepresentations, unsuitable investments, and other things, all against securities laws and internal firm rules. This is according to his public, online BrokerCheck report with FINRA.


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