FINRA Suspends Former Morgan Stanley Advisor Who Solicited Venture Capital Investment

Posted on May 23rd, 2022 at 3:09 PM
FINRA Suspends Former Morgan Stanley Advisor Who Solicited Venture Capital Investment

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) has suspended a former Morgan Stanley advisor for allegedly misleading investors regarding a private placement sold by the firm.

The California-based advisor, Nikolay Zotenko, received a one-year suspension and $10,000 fine for the violations. According to FINRA, Zotenko sent prospective retail investors at least 1,150 emails and messages in 2021 pertaining to a private placement he touted as an “Exclusive Venture Capital Investment Opportunity”, which was “typically closed to new investors.” Zotenko allegedly overhyped the investment, which was purportedly expected to generate returns that “far exceeded the industry average”, and concealed the risks of the speculative investment from investors, according to FINRA. 

Zotenko consented to the suspension without admitting or denying any of FINRA’s investigatory findings. After sending prospective investors nearly 600 emails through his Morgan Stanley account in February 2021, Zotenko sought the firm’s approval of the messages, which was denied because compliance officials said the emails contained “several issues” as well as “impermissible promissory statements”, according to FINRA. Nevertheless, Zotenko proceeded to send an additional 550 emails to prospective investors via Morgan Stanley’s internal system.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 
 
 

Tags: eccleston law, morgan stanley, finra

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