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Allen Hershberg Barred: KlaymanToskes Investigates Violations While at Morgan Stanley

November 18, 2022

National investment fraud lawyers KlaymanToskes is investigating former Morgan Stanley financial advisor Allen Hershberg in light of his recent barred status in the securities industry. If you suffered investment losses with Allen Hershberg or at Morgan Stanley’s Beverly Hills branch, contact attorney Lawrence L. Klayman at 888-997-9956 or lklayman@klaymantoskes.com to discuss your recovery options.

Beverly Hills Broker Permanently Barred After Allegations of Securities Rules Violations

Allen Hershberg (CRD# 1112312) has been permanently barred from working as a financial advisor as of November 11, 2022. His permanent barred status results from his refusal to cooperate with a FINRA investigation as explained in FINRA’s Letter of Acceptance, Waiver and Consent.

On July 27, 2022, Morgan Stanley reportedly filed a Uniform Termination Notice for Securities Industry Registration (Form U5) stating that they permitted Hershberg to resign due to “concerns regarding the representative’s unapproved outside real estate investments, as well as concerns regarding the representative’s recommendation of those same outside real estate investments to Firm clients and others, including through limited liability companies the representative created.”

The Form U5 filed by Morgan Stanley sparked FINRA’s investigation in which they required Hershberg to participate by providing documents and information pursuant to FINRA Rules 8210 and 2010. Hershberg did not respond to these requests, and therefore, violated FINRA’s Rules resulting in his termination.

Facts surrounding Allen Hershberg’s Resignation

Morgan Stanley permitted Allen Hershberg to resign after the following:

  • concerns over Hershberg’s unapproved real estate investments, and
  • concerns that Hershberg recommended the same unapproved real estate investments to Morgan Stanley clients.

 

Morgan Stanley’s U5 Filing Sparked FINRA Investigation

Morgan Stanley filed the Form U5 pursuant to FINRA Rule 4530 that requires brokerage firms to report certain events, summaries regarding written customer complaints, and copies of legal actions.  The U5 alerted FINRA to Allen Hershberg’s resignation. The U5 also triggered a FINRA investigation of the surrounding circumstances to determine whether there were violations of federal law or FINRA rules.

On September 30, 2022, FINRA sent their first request to Allen Hershberg for documents and information related to the outside real estate investments. On October 13, 2022, Hershberg confirmed in an email to FINRA that he received the request, however, he did not provide any documents. Upon FINRA’s second request for information on October 17, 2022, Hershberg did not comply with the request.

Allen Hershberg’s Securities Rules Violations

FINRA Rule 8210 states that “[n]o member or person shall fail to provide information…” A failure to provide requested documents and information is a violation of FINRA Rule 8210. Accordingly, Allen Hershberg’s failure to comply with FINRA’s multiple requests was a violation of FINRA Rule 8210.

FINRA Rule 2010 mandates that member firms and their associated persons must “observe high standards of commercial honor and just and equitable principles of trade.” Any violation of FINRA Rule 8210 is an automatic violation of FINRA Rule 2010.

Thus, by failing to comply with FINRA’s requests for documents and information in relation to their investigation means Allen Hershberg violated both FINRA Rules 8210 and 2010.

The Consequences of Allen Hershberg’s Securities Rules Violations

Allen Hershberg has been permanently barred from associating with any FINRA member in all capacities as a result of his failure to comply with FINRA’s requests. As such, he is unable to work at a brokerage firm, regardless of the position.

Allen Hershberg Morgan Stanley Investigation

 


 

Former customers of Allen Hershberg or Morgan Stanley’s Beverly Hills, CA branch who have experienced investment losses over $100,000, and those who have information relating to the manner in which Allen Hershberg handled customer accounts, are encouraged to contact Lawrence L. Klayman, Esq., at 1-888-997-9956, and download our Special Investor Report.

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered more than $250 million for investors in FINRA arbitrations and over $350 million in other securities litigation matters for its clients. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.

Contact

KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com