• September 6, 2023
• Morgan Stanley

Lawrence William Catena (CRD#: 2037155) is a Registered Broker and Investment Advisor at Morgan Stanley in Naples, FL.

Broker’s Background

He entered the securities industry in 1990 and previously worked for Merrill Lynch, Pierce, Fenner & Smith Incorporated; and McLaughlin, Piven, Vogel Securities.

Current and Past Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in May 2022 a customer dispute was filed against Lawrence Catena alleging, “ inter alia, unsuitability with respect to structured product investments- December 2021 to May 2022.” The customer dispute is still pending.

In addition, Lawrence Catena has been the subject of one other customer complaint, which includes the following:

• May 2022—“ Claimant alleges, inter alia, unsuitability with respect to investments- January 2020 to February 2022.” The customer dispute is still pending.

For a copy of Lawrence Catena’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

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.

Structured products are investment vehicles based on or derived from a single security, a basket of securities, an index, a commodity, a debt issuance and/or a foreign currency.  Structured products have a fixed maturity date and are designed to offer specific risk-return tradeoffs, which pre-set formulas for both the potential risk and potential return.  These calculations are complex and well beyond the capabilities of a retail investor.

Investors are lured into a structured product with a promise of better returns and principal protection.  This is generally not the case.  Structured products traditionally pay investors a teaser interest rate in the first 12-36 months of ownership, at which time the formula for calculating interest changes.  The investor may be forced to hold the security until maturity at a significantly lower interest rate, sometimes zero, rendering the average interest rate earned on the structured product virtually the same as a traditional, but less costly or more liquid, investment alternative.  When the structured products are long-term the principle value also fluctuates, making early liquidation difficult, if not impossible.

FINRA has issued investor notices with regard to unconventional investments like structured products.  NASD (now FINRA) Notice 05-59, which provides specific guidance on structured products, states that “NASD staff is concerned that members may not be fulfilling their sales practice obligations when selling these instruments, especially to retail customers.  FINRA mandates that “members must train registered personnel about the characteristics, risks, and rewards of each structured product before they allow registered persons to sell that product to investors….Training…should emphasize that, due to the unique nature of these products, many investors, especially retail investors, may not understand the features of the product, and may not fully appreciate the associated risks of investing in them.”

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, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.

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 mwolper@wolperlawfirm.com.