As disclosed through FINRA BrokerCheck, former registered representative Sumitro Pal (Pal, CRD No. 4763364) is named or otherwise involved in four pending customer disputes as of the date of this writing. Mr. Pal was previously affiliated with Morgan Stanley from 2004 until March 2018 in the firm’s Bethesda, MD branch office. Of these pending customer disputes, former clients of Mr. Pal are alleging unsuitability, unauthorized trading, and misappropriation of funds. Notably, the most recently filed customer dispute alleges that Mr. Pal purportedly engaged in “selling away with respect to investments.”

In instances where a broker engages in the unilateral and independent sale of securities, including, for example, promissory notes—through recommending an investment that is not on his or her brokerage firm’s approved list of securities or otherwise offered through the broker’s firm—then that broker has engaged in “selling away.” FINRA Rule 3040 prohibits a registered representative from selling any security “away” from his or her employer. And in those instances where a broker is engaged in impermissible selling away, the brokerage firm employing that person may be held liable for its failure to supervise through, among other things, facilitating comprehensive periodic audits designed to flag and address possible selling-away transactions.

Pursuant to applicable securities laws and FINRA rules, wealth management firms like Morgan Stanley have an affirmative duty to monitor their employees. Under FINRA Rule 3010, a broker-dealer must “establish and maintain a system to supervise the activities of each registered representative, registered principal, and other associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations….” The most common securities sold away from brokerage firms include promissory notes, private placements, and fraudulent offerings.

Investors who have suffered losses with Sumitro Pal, or another financial advisor, may contact our office by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost and confidential consultation to learn more about their legal rights. The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims on behalf of investors who may have been victimized by securities fraud or related misconduct.