FORT LAUDERDALE, Fla., Oct. 12, 2009 (GLOBE NEWSWIRE) -- Sonn and Erez PLC, a nationally known securities law firm, announced that it filed a $6,000,000 arbitration suit before the Financial Regulatory Authority (FINRA) against Morgan Stanley, based on allegations of misrepresentation in the sale of proprietary structured products (FINRA Case No. 09-5349). In the arbitration, the investor alleged that brokers Jose Canasi and Carlos Molina misrepresented that the structured products were "principal protected" and that the investor would not lose any of his investment; alleged that although some of the structured products did provide for the return of principal, it was often locked up for 15 years; alleged that some of the structured products did not provide principal protection and Canasi and Molina sold and realized losses on some structured products prior to maturity by quickly selling them shortly after purchasing them; alleged that Morgan Stanley liquidated the investor's structured products in June, 2009 due to the leveraged strategy it recommended, precluding the investor from ever recovering his principal in principal protected notes; alleged that Canasi and Molina failed to disclose the 15 year lock up of capital associated with some of the structured products, and failed to disclose that under certain circumstances, which actually materialized, the investor would not receive interest on his investment in the structured products.
The claimants also alleged that contrary to their investment objectives and risk tolerance, Morgan Stanley invested the vast majority of the claimant's account in risky Morgan Stanley proprietary structured products. Structured products are securities derived from or based on a single security or index, basket of securities or indices, a debt issuance, a commodity and/or a foreign currency.
The proprietary Morgan Stanley investments, which lost over $6,000,000, included: Auto Callable Note linked to America Movil and Cemex; Lehman Brothers -- shares acquired in redemption of Reverse Convertible Note; Auto Callable Note linked to Nikkei 225 and iShares Taiwan Index Fund; Auto Callable Note linked to S&P GSCI Agricultural Index Excess Return and iShares MSCI Brazil Index Fund; Garmin -- shares acquired as payout of Auto Callable; Auto Callable Note linked to Dj Euro Stoxx and Nikkei 225 Index; Auto Callable Note linked to NASDAQ 100 Index and Nikkei 225 Index; and Auto Callable Note linked to Securities Broker/Dealer Index and iShares Latin America 40 Index.
Sonn & Erez PLC is a nationally recognized law firm that concentrates its practice on representing investors in securities arbitration and litigation. Sonn & Erez is an AV-Rated law firm that represents investors nationwide in stockbroker misconduct and investment fraud cases. The firm has represented individual and institutional investors against most major Wall Street brokerage firms in claims involving stocks, bonds, structured products, options, auction rate securities, mutual funds, hedge funds, and asset backed securities. Please contact Jeffrey Sonn, Esq. or Jeff Erez at 1-866-372-8311, or 954-763-4700 for more information.