Elizabeth Ann Morrell, a previously registered investment adviser and broker, had her employment with her former brokerage firm terminated on allegations of the sale of unapproved products and securities according to an investigation by attorney Alan Rosca.
Investor attorney Alan Rosca of the Rosca Scarlato LLC law firm is currently investigating conduct related to the termination of Elizabeth A. Morrell from her former brokerage firm in February 2020, on the allegation of selling non-approved products, an act that may amount to selling away under the securities laws and regulations.
Elizabeth Morrell’s employment was terminated from Western International Securities. Western International Securities Inc. is a Financial Industry Regulatory Authority (FINRA)-registered member firm with offices in Westlake Village, CA.
Prior to her employment with this firm, Morrell was in the employment of Financial West Group, a former FINRA member firm which was expelled in February 2020.
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Elizabeth Morrell Barred By FINRA
According to a Letter of Acceptance, Waiver, and Consent (AWC), Morrell was under FINRA’s investigation for alleged participation in sales of promissory notes related to the Woodbridge Group of Companies LLC. Elizabeth Morrell reportedly did not respond to FINRA’s initial requests of documents and information.
In June 2020, without admitting or denying FINRA’s findings, Elizabeth Ann Morrell signed the AWC accepting the sanction of being barred from association with aby FINRA member in any capacity, indefinitely, FINRA reports.
What is Selling Away and Why Is It Against the Rules?
Brokerage firms are typically entrusted with the financial security of their various clients. This means that the brokerage firms are expected to do everything reasonably in their power as approved by law to ensure the financial safety of their clients’ assets. This is done by ensuring that the investors invest in vetted and approved investment products, handling clients’ investments properly, and giving suitable investment recommendations.
As a result of this, many brokerage firms have lists of approved securities and investment products which the brokers are expected to offer when recommending investments to clients. The securities on the list are approved because the brokerage firms have done the necessary due diligence on those securities and have certified them to be appropriate for investment.
Selling away occurs when an investment adviser or broker within the brokerage firm recommends to the client or trade in a security or investment product which has not been approved by the firm. It simply occurs when the broker trades in securities not on the approved firm list on behalf of a client. The securities in a sell away are usually nonpublic investments and the broker might be involved in a sell away to earn extra commissions or to avoid the scrutiny from the firm.
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Selling away can be potentially harmful to investors. As a result of this, the Financial Industry Regulatory Authority has put rules in place to regulate this activity. The FINRA rules define how a broker is expected to deal in certain investments. They impose responsibilities on both the broker and the brokerage firm before such transactions.
The broker is required to disclose the proposed transaction to the brokerage firm. The compliance department of the brokerage firm is then required to scrutinize the proposed transaction and the products involved. After the scrutiny and review, the brokerage firm could recommend to allow the broker complete the transaction or to order the broker to refrain from carrying out the transaction.
It must be noted that where the broker has made the appropriate disclosure and the brokerage firm has approved the transaction, the brokerage firm will assume legal responsibility for any outcome of the transaction.
According to the investigation by attorney Alan Rosca, broker Elizabeth Morrell allegedly failed to disclose the private transaction to the brokerage firm for approval before conducting the transaction.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
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Securities Lawyer Investigating Potential Options on Behalf of Elizabeth Ann Morrell Customers
The Rosca Scarlato LLC law firm represents investors who lose money as a result of selling away or broker misconduct and is currently investigating conduct related to broker Elizabeth Ann Morrell’s alleged participating in unapproved transactions.
The firm takes most cases of this type on a contingency fee basis and advances the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of conducts related to broker Elizabeth Morrell’s participation in unapproved transactions leading to her dismissal and subsequent FINRA sanction may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.