DALLAS, May 19, 2020 (GLOBE NEWSWIRE) -- Lawyers with Shepherd, Smith, Edwards, & Kantas ("SSEK Law Firm") recently filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Morgan Stanley on behalf of an elderly Dallas, Texas investor who sustained over $500K in losses due to the unsuitable recommendations of structured products, Master Limited Partnerships (MLPs), other oil and gas equities, and investments governed by Harvest Volatility Management’s Collateral Yield Enhancement Strategy (CYES). The CYES Strategy is an options overlay strategy that uses an “Iron Condor” approach involving puts and calls on the S&P 500 index and requires margin usage.
According to the claim, the client, an inexperienced investor, was very clear with the firm that she didn’t want to take on unnecessary risks and intended to live off of the income from the trust. Yet, despite this preference, Morgan Stanley and its agent, Barry Pechenik (Pechenik) recommended that she employ a complex options strategy that ended up exposing her to more risk than reward, as well as advised her to invest in structured products, MLPS, and other risky investments. Meanwhile, the broker-dealer assured the claimant that she was taking on minimal risk and could expect to make a comfortable income.
In addition to unsuitable recommendations, the claimant is also alleging misrepresentations and omissions, breach of fiduciary duty, and a gross lack of supervision by the firm. While the terms “puts, calls, and margin” were used during conversations with the client, she had no idea what they were talking about. However, seeing as she trusted Pechenik, she agreed to their recommendations. Claimant ultimately ended up suffering significant financial losses as a result of these unsuitable investment recommendations.
If you are or were a client of Barry Pechenik, any other advisor from Morgan Stanley, or any other brokerage firm that marketed this iron condor strategy to you and your suffered significant losses, contact SSEK Law Firm for a free, no obligation evaluation of your account. All communications will be kept strictly confidential. We have a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors nationwide to recover losses.
Contact Info: 800-259-9010
Kirk Smith: ksmith@sseklaw.com
Sam Edwards: sedwards@sseklaw.com