Sonn Law Announces That Morgan Stanley Finanical Advisors Win $3 Million in Deferred Compensation in FINRA Arbitration

March 2, 2024, Miami, Florida. — Sonn Law Group PA announced today that several former Morgan Stanley financial advisors won a collective $3 million in damages in a FINRA arbitration over claims that Morgan Stanley wrongfully withheld payments of their deferred compensation. “This is a big win for former Morgan Stanley financial advisors,” said Jeffrey Sonn, a nationally known securities lawyer representing other Morgan Stanley financial advisors over deferred compensation claims.

The amounts of deferred compensation to be paid range from about $70,000 upward to more than $600,000, plus substantial attorneys fees and interest payments. Morgan Stanley is also ordered to pay to cover the cost of certain hearing fees, member fees and related administrative expenses.

The new arbitration ruling comes several months after a court case involving similar claims was itself ordered into arbitration by the U.S. District Court for the Southern District of New York. In that mixed ruling, the judge declared that Morgan Stanley’s deferred compensation program was subject to the rules and requirements of the Employee Retirement Income Security Act, while simultaneously determining that the advisors needed to arbitrate their claims that Morgan Stanley illegally withheld certain deferred compensation payments after they chose to leave the firm.

At the time, Morgan Stanley declined to offer specific comments about the questions raised in the case or the proceedings writ large, pointing instead to the argumentation in its prior filings. In those documents, the firm argues the specific structure of its deferred compensation plan should not trigger ERISA anti-cutback protections.

“Morgan Stanley is simply wrong,” said Jeffrey Sonn, Esq. of Sonn Law Group. “In the class action case, though it was ordered to arbitration, while U.S. District Judge Paul G. Gardephe in Manhattan decided partially in Morgan Stanley’s favor, he also concluded that Morgan Stanley’s deferred compensation plan should be governed by federal pension law, specifically, the Employee Retirement Income Security Act of 1974,” said Sonn. “That means Morgan Stanley had no legal right to keep the financial advisors’ deferred compensation,” said Sonn. “Judge Gardephe ruled that the Morgan Stanley deferred-compensation plan is an ERISA pension plan meaning that our clients’ deferred compensation is vested and non-forfeitable,” said Sonn.

If you are a former Morgan Stanley financial advisor and have deferred compensation claims, contact Sonn Law Group at 833-912-3000 or at service@sonnlaw.com.

If you are a former Morgan Stanley financial advisor that was denied your deferred compensation after you left Morgan Stanley, you may have a claim for damages. Contact Sonn Law Group PA at 833-912-3000 for free information, or email us at service@sonnlaw.com.

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