FINRA Suspends Former Morgan Stanley Advisor Over $180,000 in Improper Transfers
From the desk of Jim Eccleston at 麻花传媒
The Financial Industry Regulatory Authority (FINRA) suspended former Morgan Stanley advisor C.J. Kline for two years and imposed a $5,000 fine for allegedly executing more than $180,000 in improper fund transfers between his personal and brokerage accounts.
According to a FINRA Acceptance, Waiver and Consent (AWC) letter, Kline initiated over 430 transfers from his personal bank account to his brokerage account between August 2023 and April 2024; despite knowing he lacked sufficient funds to cover the transactions. AdvisorHub reports that Kline used the credited funds to pay expenses before the firm reversed the transfers due to insufficient funds.
The activity created a negative balance of approximately $180,000 in his brokerage account. As a result, Kline still owes Morgan Stanley $52,000, according to FINRA. Kline agreed to the sanctions without admitting or denying FINRA’s findings. Neither Kline nor his attorney responded to requests for comment. Morgan Stanley terminated Kline in May 2024 for a “pattern of ACH deposits” from his bank account that were subsequently reversed, according to his BrokerCheck record. The firm stated the matter did not involve client accounts.
FINRA opened its investigation after Morgan Stanley filed a U5 termination form describing Kline’s conduct. According to AdvisorHub, the regulator concluded that Kline’s actions violated FINRA Rule 2010, which requires registered representatives to “observe high standards of commercial honor and just and equitable principles of trade.”
Kline began his career at J.P. Morgan Securities and later joined UBS before moving to Morgan Stanley in 2019. He is no longer registered as a broker but remains an investment advisor with Advisory Services Networks, where he operates Kline Private Wealth. The firm recently reported overseeing $8.7 billion in client assets. AdvisorHub reports that the suspension applies only to Kline’s broker registration. If he seeks to re-register as a broker, he must first repay the $5,000 fine to FINRA.
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Tags: eccleston, eccleston law, finra, morgan stanley





