Former Morgan Stanley Investment Advisor Sumitro Pal Alleged to Have Engaged in Selling Away
Sumitro Pal was an Investment Advisor at Morgan Stanley in Bethesda, MD. He entered the securities industry in 2004 and previously worked for Morgan Stanley & Co., Inc., and Morgan Stanley DW, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in November 2020, Sumitro Pal was the subject of a customer complaint. The complaint states, “Claimant alleges, inter alia, selling away with respect to investments – Oct, 2007.” The complaint remains pending.
In addition, Sumitro Pal has been the subject of nine other customer complaints, including three that remain pending, including the following:
● October 2020 – “Claimants allege, inter alia, unsuitability with respect to investments – Jan, 2014 – Sep, 2018.” The complaint remains pending.
● July 2020 – “PLAINTIFF ALLEGED, INTER ALIA, UNAUTHORIZED TRADING WITH RESPECT TO INVESTMENTS 2014 – 2017.” Damages of $1.5 million have been requested, and the complaint remains pending.
● November 2018 – “Claimant alleged, inter alia, Misappropriation of funds for an outside investment – 2013 to Feb 2018.” The complaint is still pending.
● May 2018 – “CLIENTS’ ATTORNEY ALLEGED, INTER ALIA, MISAPPROPRIATION OF FUNDS FOR AN OUTSIDE INVESTMENT – 2017 – FEBRUARY 2018. DAMAGES UNSPECIFIED.” The customer dispute was denied.
● May 2018 – “Claimant alleged, inter alia, Misappropriation of funds for an outside investment – Oct 2017 to Feb 2018.” The complaint was settled for $2.5 million.
● November 2017 – “CLIENT ALLEGED, INTER ALIA, THAT THEIR INSTRUCTIONS TO ONLY INVEST IN SAFE BONDS WERE NOT FOLLOWED. 2014-2016 ALLEGED DAMAGES UNSPECIFIED.” The complaint was denied.
● September 2017 – “Claimant alleged that the FA invested his retirement money in high risk corporate bonds including an over-concentration of bonds in the energy sector and also that the FA misrepresented the losses of his investments. 01/01/2013-08/31/2017” The dispute was settled for $112,500.00.
● May 2017 – “CLIENT ALLEGES THE BRANCH MANAGER FAILED TO SUPERVISE HIS FINANCIAL ADVISORS. 2014 – 2016.” The complaint was denied.
● May 2009 – “CLIENT BELIEVED THAT ANNUITY PURCHASED IN JANUARY 2008 HAD A GUARANTEED MINIMUM INCOME BENEFIT RIDER, WHICH IT DID NOT.” The complaint was settled for $16,100.00
For a copy of Sumitro Pal’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
FINRA has defined the standards in which investment recommendations made by brokerage firms and registered financial advisors are evaluated. The FINRA suitability rule focuses on three fundamental concepts: (1) reasonable basis suitability, (2) quantitative suitability, and (3) customer-specific suitability.
● Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
● Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
● Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, other investments, financial situation and needs, tax status, and investment objectives. Other considerations include the customer’s time horizon, liquidity needs, risk tolerance, and any other information disclosed by the customer.
Failure by a financial advisor to adhere to these requirements is evidence of negligence or, worse, investment fraud. If you as the investor can establish, at a minimum, negligent misconduct, you may be entitled to recover your investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at email@example.com.