76-Year-Old Scam Victim Wins $843,000 in Case Against Morgan Stanley

WEEKLY ROUNDUP
Senior Scam Alerts: Week of March 2, 2025

We are reworking this free newsletter to give you more information every week. Beginning today, we have a new format and will provide links to several stories in our weekly roundup with a focus on one story every week.

• Three arrested in pig butchering scam that stole over $13 Million from victims, including a 72-year-old Minnesota man

• 10 states where retiree fraud is on the rise 

• West Virginia couple arrested for $36,000 elder fraud scheme

MORGAN STANLEY FOUND NEGLIGENT TO SCAM VICTIM
76-Year Old Scam Victim Wins in Court Against Morgan Stanley

It’s a story that hits close to home: a savvy 75-year-old widow, Marjorie Kessler, finds herself in a scam that see her lose nearly $2.1 million. How could such a thing happen to someone so sharp?

Overview of the Scam

Imagine trusting someone with your hard-earned money, only to find out they weren't looking out for you. That's exactly what Kessler experienced. Her story raises important questions about the responsibilities of financial advisors.

The scam involved multiple criminals who pretended to be technical support staffers, employees at the bank, and even government workers. Kessler was told that she was the victim of identity theft and would face having her assets frozen.

Marjorie took out two large deposits from her Morgan Stanley account over a two week period, totaling over $2.1 million.

Marjorie Kessler Sues Morgan Stanley

Once it became clear that it was a scam, Marjorie Kessler claimed that Morgan Stanley violated two industry rules and “long-standing” industry standards designed to protect elderly clients and asked for $1.75 Million in compensatory damages.

This is what happened to Kessler, according to her statement of claim.

“During repeated phone calls during a two-week period, the scammers convinced Ms. Kessler that, in order to protect her savings, she had to rush to convert her money into cash and gold bars to be delivered to couriers and cryptocurrency which would be deposited in a US Treasury account under her new Social Security number,” according to the statement of claim.

"Despite glaring red flags and obvious warning signs of financial exploitation, Ms. Kessler’s financial advisor authorized and facilitated Ms. Kessler’s sudden withdrawal of $2.09 million in funds from a line of credit and the liquidation of assets from a life insurance trust during a nine-day period in July and August 2023,” the claim alleges.

According to the complaint, financial advisor authorized the withdrawals despite the fact that Kessler specifically asked him to keep the withdrawals “secret” and not to disclose them to her son, who had been directly involved in every major decision in his mother’s investment accounts during the prior six years.

Morgan Stanley to Pay $843,000 to Marjorie Kessler

A three-person panel under the aegis of Finra Dispute Resolution Services, decided in favor of Marjorie Kessler, ordering Morgan Stanley to pay $843,000. While the Finra arbitrators gave no explanation for the award, Schwed, the attorney for Kessler, suggested they gave Morgan Stanley a pass for the first transaction out of Kessler’s account, but penalized them for the second.

This decision was a wake-up call for many in the industry. FINRA determined that the firm failed to uphold its duty to Kessler. They didn’t adequately monitor her accounts or provide the necessary guidance.

What does negligence mean in this context? Simply put, it means that Morgan Stanley didn’t meet the standard of care expected from a financial institution. They should have been more vigilant. The ruling emphasized that financial firms must prioritize their clients’ interests. This case serves as a reminder that oversight is crucial in maintaining trust.

Comparison to Similar Cases in Financial Institutions

Kessler's case isn’t unique. There have been several similar cases across financial institutions. For instance, we can look at the case of another client who sued a major bank for mismanagement. In that situation, the bank was also found liable for negligence. These cases reveal a troubling pattern.

• Many clients feel abandoned by their financial advisors.

• Negligence rulings are becoming more common.

• Trust in financial institutions is at stake.

As we analyze these cases, it becomes clear that the financial industry must change. Clients deserve better. They deserve to feel secure in their investments. The Kessler case is a crucial part of this ongoing conversation about accountability and trust in finance.

Safeguarding Our Seniors: Lessons Learned

As we navigate the complexities of aging, it's crucial to prioritize the safety and well-being of our seniors. One of the most significant lessons we've learned is the importance of establishing trusted contact guidelines. But what does that really mean? It means creating a network of people who can help monitor and support our elderly loved ones, especially when it comes to their finances.

Establishing Trusted Contact Guidelines

Why should we set up these guidelines? Because trust is the foundation of any relationship, especially when it involves sensitive matters like money. A trusted contact can be a family member, a close friend, or even a professional advisor. This person should be someone who understands the senior's financial situation and can step in if something seems off.

We often hear stories of seniors falling victim to scams or making poor financial decisions. By having a trusted contact, we can help prevent these situations. It’s like having a safety net. If something doesn't feel right, the trusted contact can intervene and offer guidance.

Encouraging Open Dialogue

Another vital lesson is the need for open dialogue about financial concerns among families. Have you ever tried discussing money with your parents or grandparents? It can be awkward, right? But it’s essential. We need to create a space where seniors feel comfortable sharing their financial worries. This openness can lead to better understanding and support.

Consider setting regular family meetings to discuss finances. This can be a casual gathering—maybe over dinner or coffee. The goal is to ensure everyone is on the same page and that seniors feel empowered to ask questions or express concerns.

Practical Tips for Elderly Investors

Now, let’s dive into some practical tips for elderly investors to protect their assets. Here are a few strategies we can all implement:

1. Stay Informed: Knowledge is power. Encourage seniors to stay updated on financial news and trends.

2. Review Financial Plans: Regularly review investment portfolios and financial plans to ensure they align with current goals.

3. Beware of Scams: Educate seniors about common scams and how to recognize red flags.

4. Seek Professional Help: Don’t hesitate to consult with financial advisors who specialize in elder care.

In conclusion, safeguarding our seniors is a shared responsibility. By establishing trusted contact guidelines, encouraging open dialogue, and providing practical tips, we can help protect their financial well-being. Let's work together to ensure our elderly loved ones feel secure and supported as they navigate their golden years. After all, a little prevention goes a long way in safeguarding their future.