Broker Misuses Medical Malpractice Awards
Former Morgan Stanley stockbroker Charles Winitch, 49, was banned from the New York Stock Exchange for five years, Nov. 12, based on his misuse of more than $500,000 made in trades on the medical malpractice award accounts of seven children.
Winitch used the awards of the young medical malpractice victims to make huge commissions for himself, apparently counting on the idea that the abuse of the accounts would not be noted by the children, several whom had single parents with no investment experience.
Broker Preyed on Vulnerable Customers
As the NYSE hearing board described it, Winitch preyed on "particularly vulnerable customers...targeted because they were unlikely to notice the unsuitable trading." In total, Winitch garnered $105,834 out of $537,153 in commissions he generated. For example:
Guardian Accounts to Cover the Children's Needs
The children's guardian accounts pay for the medical and long-term care necessitated by their injuries. The accounts were supposed to be invested conservatively in 'A'-rated state municipal bonds and U.S. Treasury bonds, with no management fees and low commissions.
No Approval for the Trading
The NYSE regulators found that Winitch made dozens of these unsuitable trades without getting approval from the children's parents. The trades took place three or more years ago; Winitch worked at Morgan Stanley's DW brokerage until 2005.
Morgan Stanley has reimbursed the affected clients and paid $500,000 to settle the related NYSE claims.
(Sources: Bloomberg, New York Daily News)
Questions about Medical Malpractice Guardian Accounts
If you have questions about a medical malpractice guardian account, contact us to speak with an experienced medical malpractice attorney in your area who will evaluate your account and ensure your legal rights are protected.
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