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FINRA Suspends Former Morgan Stanley Broker for Forging Client’s Loan Docs

The Financial Industry Regulatory Authority has suspended a former Morgan Stanley broker for allegedly submitting forged and falsified documents to Morgan Stanley Private Bank N.A. to assist an institutional customer in securing a $15 million loan.

The Financial Industry Regulatory Authority has suspended a former Morgan Stanley broker for allegedly submitting forged and falsified documents to Morgan Stanley Private Bank N.A. to assist an institutional customer in securing a $15 million loan.

According to FINRA, Francisco Jose Faraco was assisting an institutional customer secure a $15 million loan from Morgan Stanley Private Bank using shares of its two affiliated companies as collateral.

As part of the loan process, the bank requested the passports of several individuals who the bank believed had an interest in the loan. After obtaining the passport copies, the bank notified Faraco that one of the passports was expired and requested an updated passport. Without the consent of the passport holder, Faraco allegedly altered the expiration date on the passport and sent a copy to the bank.

The bank also requested that the corporate customer and its affiliated companies sign written assurances regarding the collateral for the loan. FINRA claims that Faraco believed that the additional assurances were duplicative and he allegedly forged the signature of the CEO of the corporate customer on two documents without consent, as well as the signatures of two representatives of the affiliated companies.

The bank, which ultimately approved the loan, learned of Faraco’s alleged misconduct when a representative of one of the affiliated companies complained. Faraco was eventually terminated over the allegations.

FINRA suspended Faraco from associating with any FINRA member for three months and issued a $5,000 fine.

Faraco first entered the securities industry in January 2006 and was previously registered with Merrill Lynch, Santander Securities, and J.P. Morgan Securities. He holds FINRA Series 3, 7, and 66 licenses. Faraco is no longer associated with any FINRA member firm and has no previous disciplinary history.

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