Finra Sanctions Ex-Morgan Stanley Broker Over $1.6k Alleged Expense Abuses
A 24-year industry veteran who spent his entire career at Morgan Stanley disclosure-free until his discharge over concerns about inaccurate expense report filings has agreed to a $5,000 regulatory fine and two-month suspension over the allegations.
The meals, which took place between January 2018 and May 2019, were actually “personal in nature,” according to a separate U5 notice filed by Morgan Stanley that appears on Lienart’s BrokerCheck.
Lienart, who gave up his brokerage license but has been registered as an investment advisor with Healdsburg, California-based Integrated Advisors Network since September 2019, settled the charges without admitting or denying the findings.
He did not return an emailed request for comment, and his lawyer, Rebecca MacLaren of Sawyer & Labar LLP, did not return a call for comment. Morgan Stanley’s U5 notice notes that no clients were charged for the expenses.
The Finra suspension does not affect Lienart’s investment adviser license, which is maintained by the Securities and Exchange Commission, and the fine is only due if he attempts to rejoin the brokerage industry.
A Morgan Stanley spokeswoman declined to comment on the allegations, or if they were related in any way to the firm’s disbursements from its Alternate Flexible Grid accounts. The AFG program lets Morgan Stanley brokers set aside pre-tax compensation to pay staff and entertain clients.
Brokers often trip up with the programs, which require them to seek reimbursement of their pre-tax compensation deductions annually or lose the money.
Lienart’s penalty matches that of another Finra enforcement action in February against a former Morgan Stanley broker in Los Angeles who over a five-year period allegedly submitted a number of expense claims for business meals that had included the wrong names of the clients or prospects who had attended. The regulator said the expenses in that case were legitimate but still considered the actions a Rule 2010 violation.
In April 2020, Finra suspended a 25-year brokerage industry veteran for six months for violating terms of the AFG program when she was working at Morgan Stanley by allegedly using funds for a client associate bonus but then attempting to recoup a portion of that bonus.