CHICAGO, March 07, 2016 (GLOBE NEWSWIRE) -- The White Law Group announces that it has filed a Financial Industry Regulatory Authority (FINRA) arbitration statement of claim against Morgan Stanley involving the firm's Cushing MLP High Income Exchange Traded Note.
The claim, filed by The White Law Group, was submitted to FINRA Dispute Resolution on behalf of two North Carolina investors alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision.
The claim further alleges that Morgan Stanley unsuitably invested the clients in its proprietary Morgan Stanley Cushing MLP High Income ETN investments and failed to adequately disclose the risks of the investment to its clients.
Before recommending an investment, a broker-dealer has a fiduciary duty to adequately disclose the risks involved in the investment and to perform the necessary due diligence to determine whether the investment is suitable for the investor in light of that investor's age, investment experience, net worth, income, and investment objectives.
The Morgan Stanley Cushing MLP High Income Index ETN is an exchange-traded note issued by Morgan Stanley. The Notes aim to provide investors with a cash payment at the scheduled maturity or early repurchase and variable coupon payments each quarter, in each case based on the performance of the underlying index, the Cushing MLP High Income Index.
When asked about the claim, D. Daxton White, the firm's managing partner, stated, "We are concerned that Morgan Stanley may have improperly recommended the Morgan Stanley Cushing MLP High Income ETN to a number of income seeking investors. In this low yield environment, investors are seeking income producing investments, but the question is whether the investors understand the risk associated with investments like this - which provide income...but at enormous risk. We are also concerned that firms like Morgan Stanley would put investors in high risk investments that the clients clearly do not understand."
Although currently trading at $6.07/share, the Morgan Stanley Cushing MLP High Income ETN was trading for $19.27 as recently as October 2014 (a decline of more than 65% during that time period).
FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional. It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.
For more information on the claim filed by The White Law Group, please contact the firm's Chicago office at 312-238-9650.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://www.whitesecuritieslaw.com.