Former Morgan Stanley Broker C.J. Kline Suspended Two Years by FINRA Over Improper Fund Transfers
The Financial Industry Regulatory Authority (FINRA) has suspended former Morgan Stanley broker C.J. Kline (CRD#: 4362678) for two years and fined him $5,000 after finding that he initiated more than $180,000 in improper fund transfers between his personal and brokerage accounts.
According to FINRA’s settlement findings, between August 2023 and April 2024, Kline repeatedly transferred money from his personal bank account into his Morgan Stanley brokerage account despite knowing he lacked sufficient funds to cover the transactions. The transfers created temporary credits in his brokerage account, which he then used to pay expenses before the transfers were reversed for insufficient funds.
By April 2024, the activity had resulted in a negative balance of approximately $180,000 in his Morgan Stanley account. FINRA determined that Kline’s actions violated Rule 2010, which requires brokers to uphold high standards of commercial honor and just and equitable principles of trade.
Employment Termination and Investigation
Kline was terminated by Morgan Stanley in May 2024, following what the firm described as a “pattern of ACH deposits from the representative’s bank account to his personal account at the firm that were subsequently reversed.” The firm noted that none of the allegations involved client funds or customer activity.
The FINRA investigation stemmed from the Form U5 termination notice filed by Morgan Stanley, which prompted a deeper regulatory review of Kline’s financial practices.
Kline, who began his career with J.P. Morgan Securities and later worked for UBS, had been with Morgan Stanley for five years prior to his termination. He is no longer a registered broker but remains an investment advisor with Advisory Services Network, where he operates Kline Private Wealth.
Financial Accountability and Industry Standards
FINRA’s action against Kline underscores the importance of financial integrity within the securities industry. Even when customer accounts are not directly affected, a broker’s misuse of firm systems or misrepresentation of personal financial health violates professional conduct rules designed to maintain market trust.
Silver Miller Protects Investors Nationwide
While Kline’s case did not directly involve client funds, investors should remain alert to any signs of broker misconduct, fund mismanagement, or account irregularities. If you suspect your financial advisor engaged in questionable practices or failed to act in your best interest, legal remedies may be available.
Silver Miller represents investors nationwide in cases of broker fraud, financial misrepresentation, and regulatory violations. Our attorneys hold financial institutions accountable for supervisory failures and misconduct.
Contact Silver Miller for a free, confidential consultation. We handle all cases on a contingency fee basis—you pay nothing unless we recover for you.
