A former client service administrator at Morgan Stanley was fined and suspended by the Financial Industry Regulatory Authority Inc. for fraudulently transferring a total of $108,680 out of a client's account to third party bank accounts and for falsifying records.
Debra J. Ferrara was terminated by Morgan Stanley in December 2011 for falsifying information recorded in Morgan Stanley's books, according to
the settlement accepted Friday by Finra's department of enforcement. In settling the matter, Ms. Ferrara agreed to be fined $5,000 and suspended from the securities industry for 60 days without admitting or denying Finra's finding.
Ms. Ferrara previously provided administration support to a financial adviser who was responsible for the targeted client's account. In November 2011, Ms. Ferrara received an email instruction forwarded by the adviser asking to process a wire transfer from a client's account to a third party bank account, according to the settlement. They were unaware at the time that the instruction was sent by an impostor who hacked the email account of the client's authorized person.
By Morgan Stanley's protocol, Ms. Ferrara should have contacted the authorized person to verbally confirm the transfer instruction and record the event on Morgan Stanley's internal records, but no contact was ever made. Instead the settlement stated that Ms. Ferrara falsely wrote on the record that she did verbally confirm all the transfers with the client's authorized person, and also “provided fictitious reasons for the transfer such as bills, medical bills or bills payment,” made up on her own accord.
Morgan Stanley's spokeswoman, Christine Jockle, declined to comment.
According to the settlement, Ms. Ferrara has been in the securities industry since May 1983. From June 2005 to June 2009, she was working at Citigroup Global Markets Inc., before moving over to Morgan Stanley Smith Barney in June 2009. Since her termination from Morgan Stanley, Ms. Ferrara was associated with another Finra firm from May 2013 to April 2015. She is not currently associated with any Finra firm.
Ms. Ferrara could not be reached for comment. Ms. Ferrara's counsel, Elizabeth Bernhardt, did not immediately reply to the request for comment.
(See:
Finra bars former broker for lifting $400,000 from parents' accounts)
