Morgan Stanley Ordered to Pay Huntington Bank's Brokerage Unit

Posted on June 1st, 2023 at 1:15 PM
Morgan Stanley Ordered to Pay Huntington Bank's Brokerage Unit

From the desk of Jim Eccleston at Eccleston Law 

Morgan Stanley, along with two advisors, has been found jointly responsible for $333,000 in damages and legal fees by an arbitration panel of the Financial Industry Regulatory Authority (FINRA). The ruling is based on allegations of breach of contract relating to the advisors’ departure from Huntington Bank.

Huntington had alleged that Morgan Stanley “encouraged and induced” the advisor duo to violate their employment agreements by soliciting customers to transfer assets before their move.

This award highlights the legal challenges that Wall Street firms encounter when recruiting from regional banks and non-traditional sources, where advisors often have stricter restrictive covenants and firms are more proactive in retaining their client base.

According to AdvisorHub, the award falls short of Huntington's original claim. The bank initially requested $1.16 million in cumulative damages over five years, an additional $2.32 million in punitive damages, and $179,784 for attorney fees, which was granted. The advisors filed a counterclaim seeking $430,500 in lost business income. However, all of Morgan Stanley's and the advisors' counterclaims were dismissed by the FINRA arbitrators.

In addition to the $$333,000 damages award, the advisors agreed to a stipulated temporary restraining order in February 2021, the details of which were not provided in the award.

 

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

 

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I cannot thank you enough for your guidance. It's a good feeling knowing someone is fighting for you.

Matt J.

LATEST NEWS AND ARTICLES

March 13, 2026
Connecticut Advisor Pleads Guilty to Ponzi-Like Investment Fraud and Tax Evasion

Federal prosecutors announced that investment adviser John A.

March 12, 2026
Cape Coral Becomes Ground Zero for Private Lending Strains in Post-Pandemic Housing Market

Cape Coral, Florida, long a magnet for out-of-state real estate investors, now illustrates the growing risks of private lending in residential development.

March 11, 2026
SEC and Commonwealth Financial Network Move Toward Settlement in Revenue Sharing Disclosure Case

The Securities and Exchange Commission (SEC) and Commonwealth Financial Network notified a federal court that they are attempting to resolve a long running enforcement dispute involving alleged disclosure failures tied to revenue sharing payments, according to ThinkAdvisor.