Morgan Stanley Ordered to Pay $782,000 Over Mismanagement of Client’s Estate

Posted on April 4th, 2023 at 1:05 PM
Morgan Stanley Ordered to Pay $782,000 Over Mismanagement of Client’s Estate

From the desk of Jim Eccleston at Eccleston Law 

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Morgan Stanley to pay $782,000 to a client’s estate after the firm allegedly ignored court-ordered limits when permitting a conservator to withdraw from the account.

Morgan Stanley will pay $554,834 in damages and $227,438 in interest to the estate. The claimant had alleged that a conservator was allowed to transfer “large sums of money” from the accounts despite Morgan Stanley having “actual knowledge” of the limits, according to the award.

The estate’s arbitration claim accused Morgan Stanley of unauthorized transactions, breach of fiduciary duty, breach of know-your-customer rules and general violations of FINRA rules. The estate had sought more than $3.7 million compensatory and punitive damages while Morgan Stanley denied the allegations and claimed to only be liable for $154,740 in damages, according to the award. The panel did not explain its decision, but the damage total nearly equals the $547,082 that the estate had sought specifically for “disbursements.”

 

Eccleston Law LLC represents financial advisors and investors nationwide in securities, employment, transition, regulatory and disciplinary matters.

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