Doug McKelvey is accused of misappropriation of client funds. Regulators barred this ex-Morgan Stanley broker from the securities industry in August 2022.
Morgan Stanley terminated McKelvey in April 2022 for his “unauthorized activity and misappropriation of funds from client accounts, which were held by relatives of the representative.” This means that his employer believed that he was making unauthorized transactions, which often include churning. This was in addition to stealing funds investor accounts.
Lawsuits followed the allegations. Morgan Stanley settled one of the lawsuits for $1.2 million. The second suit is still pending. These lawsuits were filed as arbitrations with FINRA. Morgan Stanley, like all FINRA members, has a mandatory arbitration clause in its investor contracts. Criminal charges have not yet been filed but may be pending.
McKelvey refused to defend himself when given the opportunity to do so. FINRA, the Financial Industry Regulatory Authority, then barred him from the securities industry for failing to cooperate in the FINRA investigation.
McKelvey operated primarily in the Dallas / Ft. Worth Metroplex and did so for approximately 20 years. He worked with UBS and Citi Group prior to his employment with Morgan Stanley.
Morgan Stanley stated, “McKelvey was terminated following an internal review regarding allegations that he engaged in unauthorized activity and misappropriation of funds from accounts held by a small number of his relatives.”
We are a firm representing investors and recovering lost or stolen funds. Since 2002 we have represented hundreds of investors across the country seeking to hold investment professionals responsible for misdeeds. McKelvey’s actions are particularly egregious. Fortunately, this type of fraud is somewhat rare in the securities industry. But it does happen.
This post is for the discussion of a current event that can serve to educate investors on the types of potential investment fraud.
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