July 09, 2014 11:37 PM ET

Capital Markets

Company Overview of Morgan Stanley Smith Barney LLC

Company Overview

Morgan Stanley Smith Barney LLC is a boutique investment banking firm that offers financial advisory services. The firm offers security trading, account monitoring, financial consulting, and transaction management and advisory services. Additionally, it provides strategy development and financial planning services. Morgan Stanley Smith Barney LLC is headquartered in Purchase, New York. Morgan Stanley Smith Barney LLC operates as a subsidiary of Morgan Stanley Smith Barney Holdings LLC.

2000 Westchester Avenue

Purchase, NY 10577-2530

United States

Founded in 2009





Key Executives for Morgan Stanley Smith Barney LLC

Age: 51
Chief Operating Officer
Age: 49
Chief Executive of Australian Wealth Management Business
President of International Wealth Management Business
Head of Capital Markets & International Wealth Management
Compensation as of Fiscal Year 2014.

Morgan Stanley Smith Barney LLC Key Developments

The Financial Industry Regulatory Authority Fines Morgan Stanley Smith Barney LLC $5,000,000 for Supervisory Failures Related to Sales of Shares

The Financial Industry Regulatory Authority (FINRA) announced that it has fined Morgan Stanley Smith Barney LLC $5,000,000 for supervisory failures related to the solicitation of retail customers to invest in initial public offerings. From February 16, 2012, to May 1, 2013, Morgan Stanley Smith Barney sold shares to retail customers in 83 IPOs, including Facebook and Yelp, without having adequate procedures and training to ensure that its sales staff distinguished between 'indications of interest' and 'conditional offers' in its solicitations of potential investors. On February 16, 2012, Morgan Stanley Smith Barney adopted a policy that used the terms 'indications of interest' and 'conditional offers' interchangeably, without proper regard for whether retail interest reconfirmation was required prior to execution. The firm did not offer any training or other materials to its financial advisers to clarify the policy and, as a result, sales staff and customers may not have properly understood what type of commitment was being solicited. FINRA also found that Morgan Stanley Smith Barney failed to adequately monitor compliance with its policy and did not have procedures in place to ensure that conditional offers were being properly solicited consistent with the requirements of the federal securities laws and FINRA rules.

Klayman & Toskes Files $2 Million Claim against Morgan Stanley Smith on Behalf of a UPS Employee

Klayman & Toskes announced that it filed a claim against Morgan Stanley Smith Barney ("Smith Barney") on behalf of a UPS employee for losses sustained as a result of maintaining a concentrated, leveraged position in UPS stock. The suit was filed with FINRA's arbitration department, and seeks damages of $2,000,000. The claim states that the Claimant worked over 23 years with UPS and accumulated shares of the company through UPS' Employee Stock Purchase Plan and Managers Incentive Program, which represented virtually his entire life savings. The Claimant opened a Hypothecation Loan ("hypo loan") whereby the UPS stock served as collateral. In opening an account with Smith Barney, Claimant's hypo loan was converted to a margin loan through Smith Barney. While Smith Barney loaned Claimant money using his UPS stock as collateral, Smith Barney failed to recommend a collar and/or protective put option as a risk management strategy to protect Claimant's concentrated position in UPS stock. A collar and/or protective put option would have prevented a collateral call on the loan when the UPS stock substantially declined below the loan-to-value-ratio. Having the UPS stock collared would have increased the borrowing power in Claimant's account allowing him to borrow 90% of the protective put option of the collar. However, Smith Barney, looking to make money on the loan, facilitated the unsuitable investment strategy of borrowing against a concentrated stock position without a collar and/or protective put option in place. By failing to protect the concentrated position and/or recommend risk management strategies, Claimant received margin calls which triggered the sale of his UPS stock. This case is about the failure of Smith Barney to collar and/or protect Claimant's UPS stock which represented a large portion of his life savings. As a direct result of Smith Barney's negligence, Claimant lost his life savings and filed for Chapter 7 bankruptcy.

Ceres Managed Futures LLC Appoints Morgan Stanley Smith Barney LLC as Non-Exclusive Agent

Effective April 1, 2014, Managed Futures Premier Warrington L.P., Ceres Managed Futures LLC, the general partner of the company and Morgan Stanley Smith Barney LLC (MSWM), amended the alternative investment selling agent agreement dated November 12, 2013 between the general partner, the company and MSWM, pursuant to which MSWM has been appointed as a non-exclusive agent of the company for the purpose of finding eligible investors for units of limited partnership interests in the company through offerings that are exempt from registration under the Securities Act of 1933.

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