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Investor Alleges Kristi Gruett Facilitated Unsuitable Account Strategy

Kristi Gruett (CRD #: 2600368), a broker registered with Morgan Stanley, is the subject of a pending investor dispute, according to her BrokerCheck record, accessed on January 18, 2023. If you want to know more about her alleged conduct as a broker, read on.

Investor Dispute

On December 12, 2022, an investor alleged, among other claims, that Kristi Gruett facilitated an unsuitable managed account strategy in 2021. This dispute is currently pending.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to take into account investors’ financial goals when recommending investments. Brokers must consider the characteristics described in the investor’s profile, such as their risk tolerance, age, and tax status.

Some examples of violations of this rule include:

  • Investments can be unsuitable because they are high-risk and therefore more likely to lose money.
  • They can also be unsuitable due to a lack of liquidity. Illiquid investments are intended to be held for an extended time, and investors may incur high fees when they cash out.
  • Trading activity taken as a whole can be quantitatively unsuitable, meaning that the broker executed an excessive number of trades.

These requirements apply to the overall investment strategy as well. For instance, overconcentration in a particular stock or sector may be an unsuitable investment strategy for some investors.

Investors who rely on brokers for investment recommendations can seek out FINRA arbitration and potentially recoup their losses.

Background Information

Kristi Gruett has passed the following exams:

  • Series 65 – Uniform Investment Adviser Law Examination
  • Series 63 – Uniform Securities Agent State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative Examination

Kristi Gruett is a registered broker in 29 states and a registered investment adviser in California, Texas, and Washington.

She has also worked for Citigroup Global Markets (CRD#:7059) and Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691).

Kurta Law Can Help

If you worked with Kristi Gruett and you have concerns about your investments, please contact us today at 877-600-0098 or for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.