In another example of reasons why you should keep your friends close and your personal securities lawyer even closer in today’s wealth management environment, a former Morgan Stanley broker has filed a $30M lawsuit against the firm. Sighting wrongful termination, and unjust enrichment, the advisor may just have a case.
“The termination cost (Kerry) Moy his 34-year career as a wirehouse broker and more than $100 million of assets from customers reluctant to follow him to Western International Securities, where he is now registered as an independent investment adviser, according to Robert Girard, a plaintiffs’ lawyer who is representing him.”
“Moy’s restaurant career was widely publicized in several national and local articles and was likely known by Morgan Stanley when they recruited him in 2012 from Merrill Lynch, where he had worked since the start of his brokerage career in 1984, according to Girard. The firm also had earlier approved the outside business activities that he had disclosed, he said.”
What an interesting twist of events. Morgan Stanley woos and recruits a well-known advisor who happens to have a highly publicized basket of restaurants that have contributed to the growth of his book of business, and by and large, the local reputation of the firm he works for. Morgan Stanley is keenly aware of the ‘outside activities’ that Mr. Moy is involved in and has known about them for years.
And then he is abruptly fired. His FINRA record and the language connected to his dismissal is a mystery given that the firm was surely aware of Mr. Moy’s restaurant activities. He has no previous events on his BrokerCheck record, other than a lawsuit stemming from a limited partnership Mr. Moy was involved in. Several months later, his wealth management career is over.
The take away here is simple. As a financial advisor, should you find yourself a party to a lawsuit, tax lien, customer complaint, or any manner of ‘inquiry’ – in the current compliance and legal environment in the industry – you are highly likely to be fired. If you aren’t taking several extra steps to protect yourself in the event you are falsely accused, you are obfuscating your duty to be a fiduciary of your own career.
Or better yet, get out of the wirehouse space altogether and open up your own shop. Food for thought.