A FINRA arbitration panel has ruled that Morgan Stanley must pay more than $3 million in compensatory damages, attorney's fees, interest and case expenses to a number of former advisors who say the firm inappropriately withheld deferred compensation payments after they left employment.
The arbitration order is the latest in a lengthy and complex legal saga involving the firm's deferred compensation arrangement and its alleged refusal to pay six-figure benefits to departed advisors.
As detailed in the new FINRA arbitration order shared with ThinkAdvisor by an attorney representing some of the former advisors, the amounts of deferred compensation to be paid range from about $70,000 upward to more than $600,000, plus substantial attorneys fees and interest payments. Morgan Stanley is also ordered to pay to cover the cost of certain hearing fees, member fees and related administrative expenses.
In response to a request for comment about the order, a Morgan Stanley spokesperson offered the following: "Morgan Stanley has long offered deferred compensation to financial advisors to reward them for loyalty and good guardianship. This is not a retirement plan, as prior arbitration panels have rightly decided, and we think the panel reached the wrong result. We will continue to aggressively defend against meritless attacks suggesting otherwise."
