• February 16, 2024
• Morgan Stanley

Jesus Rodriguez (CRD#:4888685) is a previously registered broker and investment advisor.

 

Broker’s Background

He entered the securities industry in 2005, and previously worked with Merrill Lynch Pierce Fenner & Smith Inc.; Citigroup Global Markets Inc.; and Morgan Stanley.

 

Allegations of Misconduct

According to publicly available records released by The Securities and Exchange Commission (SEC), in January of 2024, The Securities and Exchange Commission charged Jesus Rodriguez, a former financial advisor, with fraud for misappropriating more than $3.475 million from ten brokerage account holders and advisory clients.

 

The SEC’s complaint alleges that from 2014 to 2021, while employed as a registered representative and investment adviser representative in the El Paso office of a large financial institution, Rodriguez initiated more than 250 fraudulent and unauthorized disbursements from the accounts of ten of his brokerage customers and advisory clients.  Rodriguez allegedly used the funds he misappropriated for personal expenses including to pay credit card bills, to buy automobiles, and to pay his family members.  The SEC alleges that in many instances Rodriguez funded his misappropriations by incurring a debt for the account holder that was secured by the securities portfolios in their brokerage and/or advisory accounts.

 

In other instances, Rodriguez allegedly misappropriated the proceeds of securities sales.  The SEC further alleges that Rodriguez engaged in deceptive conduct to further conceal his misappropriation scheme, including by fabricating authorizations for the transfers and by lying to his employer when asked about certain transactions involving the affected accounts.

 

The SEC’s complaint, filed in the U.S. District Court for the Western District of Texas, charges Rodriguez with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.  The SEC seeks permanent injunctive relief, the disgorgement of allegedly ill-gotten gains plus prejudgment interest, and a civil penalty. The investigation is still ongoing.

 

For a copy of the SEC litigation press release, click here.

 

In addition, Jesus Rodriguez has 15 other SEC advisor disclosures, which include the following:

• August 2023—“Client’s attorney alleges, inter alia, forgery and misappropriations of funds from the client’s account from 2014 – 2021.” The damage amount requested as $2,845,953.00 and the customer dispute settled for $2,542,784.37.
• April 2023—“CLIENT ALLEGES, INTER ALIA, THAT FUNDS WERE FRAUDULENTLY TRANSFERRED OUT OF HIS ACCOUNT 2016-2021.” The customer dispute is still pending.
• February 2022—“CLIENT ALLEGES THAT BOND PURCHASES WERE UNSUITABLE DAMAGES UNSPECIFIED 2018.” The customer dispute was denied.
• February 2022—“Complainant verbally alleges fraudulent activity in her legacy Express Credit Line account from November 1, 2018 to August 31, 2020.” The customer dispute settled for $508,447.90.
• January 2022—“Client allege, inter alia, that funds were misappropriated from his accounts from March 19, 2014 to March 26, 2020.” The customer dispute settled for $334,326.07.
• January 2022— “CLIENTS ALLEGE FUNDS WERE MISAPPROPRIATED FROM THEIR ACCOUNT 2019 -2021 ALLEGED DAMAGES UNSPECIFIED.” The customer dispute settled for $280,871.53.
• December 2021—“CLIENT ALLEGED THAT THERE WERE FUNDS MISAPPROPRIATED FROM THEIR ACCOUNT DURING THE PERIOD DEC 2020 TO JUNE 2021. DAMAGES UNSPECIFIED.” The customer dispute settled for $102,286.62.
• November 2021—“ Without admitting or denying the findings, Rodriguez consented to the sanction and to the entry of findings that he refused to provide information and documents requested by FINRA during the course of its investigation of a Form U5 filed by his member firm. The findings stated that the U5 disclosed that Rodriguez had voluntarily resigned a month earlier following allegations regarding his use of client line of credit for his personal benefit.” As a result, Jesus Rodriguez was barred by FINRA.
• September 2021—“CLIENT ALLEGED THAT THERE WERE FRAUDULENT WITHDRAWALS FROM HIS ACCOUNT 2019 DAMAGES UNSPECIFIED.”
• September 2021—“CLIENT ALLEGES, INTER ALIA, THAT FUNDS WERE MISAPPROPRIATED FROM THEIR ACCOUNTS AND THAT THERE WERE UNAUTHORIZED MUTUAL FUND TRADES AS WELL 2020-2021 DAMAGES UNSPECIFIED.” The customer dispute settled for $246,929.79.
• August 2021—“CLIENT ALLEGED THAT THERE WERE UNAUTHORIZED WITHDRAWALS OF FUNDS FROM HER ACCOUNT 2020-2021.” The damage amount requested was $266,000.00, and the customer dispute settled for $245,829.40.
• August 2021—“CLIENT ALLEGED, INTER ALIA, THAT FUNDS WERE WITHDRAWN FROM THEIR ACCOUNT WITHOUT THEIR KNOWLEDGE 2017-2020.” The customer dispute settled for $376,532.96.
• August 2021—“CLIENT ALLEGES FUNDS WERE MISAPPROPRIATED FROM HER ACCOUNT IN MARCH 2020.” The damage amount requested was $28,000, and the customer dispute settled for $30,470.00.
• August 2021—“Allegations regarding registered representative’s use of client line of credit for his personal benefit.” Morgan Stanley permitted Rodriguez to voluntarily resign.
• July 2021—“Clients allege, inter alia, that the FA used their line of credit for his personal benefit. 2017 – 2021.” The customer dispute settled for $6,200.

 

For a copy of Jesus Rodriguez’s SEC Advisor Info, click here.

We Help Investors Recover Investment Losses

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

 

In addition, to the extent a Financial Advisor converts client assets during the course and scope of his employment and/or registration with the brokerage firm, that brokerage firm may be held liable for any attendant 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 mwolper@wolperlawfirm.com.