Chicago FINRA Arbitrators Award Ten Former Financial Advisors Over $3 Million For Forfeited Deferred Compensation Damages, Interest and Attorneys’ Fees

Posted on March 25th, 2024 at 9:17 AM
Chicago FINRA Arbitrators Award Ten Former Financial Advisors Over $3 Million For Forfeited Deferred Compensation Damages, Interest and Attorneys’ Fees

Ten former Morgan Stanley financial advisors have been awarded over $3 million related to the firm’s wrongful forfeiture of the advisors’ deferred compensation.

The advisors were represented by Chicago-based Eccleston Law LLC, Rosca Scarlato LLC of Ohio and Salmanson Goldshaw PC of Pennsylvania.

The financial advisors alleged violations of ERISA as well as state labor law violations and various common law causes of action. The financial advisors took the position that the deferred compensation had been earned and thus could not be forfeited under any circumstances, including by their resignations to work for other financial services firms. Morgan Stanley, on the other hand, defended the claims by alleging that the deferred compensation was not earned, was merely a bonus, and that the firm had disclosed in writing that the deferred compensation could be forfeited, for example, upon an advisor’s resignation.

Although the FINRA award is not reasoned, which is customary in FINRA arbitrations, one reasonably can infer that the FINRA arbitrators rejected Morgan Stanley’s defenses.

The law firms have another dozen or so FINRA arbitrations for former Morgan Stanley financial advisors pending across the United States.

Tags: Eccleston, Eccleston Law

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