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A former Morgan Stanley advisor, Christopher Armstrong, is suing the wirehouse, hoping to overturn a FINRA judgment that would price him $2 million.
The go well with, filed in New Jersey federal courtroom, is the most recent volley in a prolonged authorized battle involving Morgan Stanley, Charles Schwab, Armstrong and one other former advisor who, in an unrelated authorized case, is now serving time on baby pornography expenses.
The saga started in 2019. New Jersey-based Christopher Armstrong and Florida-based Randall Kiefner, each then monetary advisors at Charles Schwab, notified the agency they have been quitting to arrange a follow at Morgan Stanley.
Schwab instantly accused the duo of soliciting purchasers to affix them in violation of their employment contracts, printing out consumer lists a number of instances and viewing 148 consumer profiles on a pc display screen “in speedy succession,” in line with their grievance.
The duo later claimed that Morgan Stanley administrators informed them their restrictive covenants wouldn’t be an issue, employed attorneys for them, and informed them to anticipate the low cost dealer to file a restraining order towards them.
Schwab did so in April 2019, forcing them to cease contacting purchasers. Morgan Stanley then fired the pair, and the legislation agency dropped them.
With the restraining order in place, Schwab went after Morgan Stanley and the advisors in a FINRA arbitration, successful over $7 million. The arbitration panel mandated Morgan Stanley pay $3 million in punitive damages and all three events collectively to pay the identical quantity in compensatory damages. On the identical time, the FINRA judges mentioned Morgan Stanley must pay Armstrong $2.8 million and Kiefner $1.17 million in damages together with lots of of hundreds in attorneys’ charges and revise their Varieties U5 to replicate a voluntary departure from the agency regardless of the scandal.
Morgan Stanley then sued the advisors, claiming the wirehouse had coated the advisors’ share of the damages and different charges, totaling greater than $4 million. Within the courtroom submitting, Morgan Stanley mentioned it may not agree with the arbitration panel’s choice however would “absolutely honor all of its obligations.”
“By refusing to pay their proportionate share of this … award, Armstrong and Kiefner are choosing and selecting which parts of the award they like and which of them they’ll ignore and violate, which is manifestly improper,” the Morgan Stanley submitting learn.
A separate FINRA arbitration panel agreed in November, demanding Armstrong and Kiefner kick of their portion of the unique damages to Morgan Stanley.
Armstrong responded along with his lawsuit towards Morgan Stanley this week in New Jersey, claiming he isn’t equally liable because the wirehouse within the dispute and shouldn’t need to pay the $2 million.
Kiefner, nonetheless, faces extra important points. In April 2021, Yahoo alerted authorities that he despatched emails to himself containing baby pornography. Officers questioned him in April of final 12 months, and in line with an affidavit, he admitted to viewing the fabric. He was charged and sentenced to 6 years in jail.
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