Nearly a year after being barred from the securities industry, former Morgan Stanley financial advisor Eric B. Kleiner is the subject of multiple customer complaints and arbitrations, according to regulatory records. Clients allege that Kleiner recommended investments and strategies that were not approved by the wirehouse, and that he used personal communication devices to share confidential firm information.
Morgan Stanley, one of the largest wealth management firms in the U.S. with roughly 15,000 advisors, terminated Kleiner in March 2025. His BrokerCheck profile states that the discharge was based on allegations that he made "recommendations to customers of non-firm approved and firm restricted investments." The specific securities involved have not been disclosed, but the profile notes that some of the investments were also held by Kleiner personally.
Kleiner, who began his career in 2000 at Prudential Securities Inc., joined Morgan Stanley in 2016. He could not be reached for comment, and a Morgan Stanley spokesperson declined to discuss the matter.
In October 2025, FINRA barred Kleiner from the industry after he failed to cooperate with its investigation into his termination. The bar is permanent and prevents him from acting in any capacity with a FINRA-regulated firm.
So far, Morgan Stanley has settled three customer complaints involving Kleiner for approximately $1.1 million. The firm is also facing three additional complaints seeking a combined $811,000 in damages, as well as four complaints that do not specify a dollar amount, which could potentially lead to higher payouts.
The situation echoes other cases where broker misconduct has led to costly settlements for large firms. For example, Stifel Financial Corp. has paid millions to clients of former star broker Chuck Roberts, who was accused of unsuitable sales of structured products. In July, Stifel agreed to pay nearly $3.6 million to two groups of customers who sued over those sales.
Industry observers note that when advisors recommend unapproved products, firms face not only regulatory penalties but also a wave of investor arbitration claims. The trend highlights the importance of compliance oversight, especially as younger investors show weaker loyalty to advisors, making trust and transparency even more critical.
For advisors and firms, the case serves as a reminder that personal communications and outside investments can create compliance risks. As institutional investors demand stable rules and scale, the industry is under pressure to maintain rigorous standards.
While the full extent of Kleiner's alleged misconduct is still unclear, the number of claims and the size of settlements suggest that the impact on clients and the firm has been significant. The case also underscores the potential consequences of failing to cooperate with regulatory investigations, as FINRA's bar effectively ends a broker's career.
