Finra arbitrators ordered Morgan Stanley & Co. to pay $640,747 to an investor for selling her Apple Inc. stock without her consent.
The three-person all-public Financial Industry Regulatory Authority Inc. arbitration panel found Morgan Stanley liable for unauthorized trading, according to an Aug. 3 arbitration award.
The investors, Joan A. Rudnick and an entity owned by her, Oak Trail Associates, filed a claim in October 2020. In addition to unauthorized trading, their causes of action against Morgan Stanley included breach of contract and duty of loyalty, unjust enrichment and conversion.
The arbitrators awarded Rudnick $482,000 in compensatory damages, $83,372 in federal and state taxes, $45,000 in attorneys’ fees, $25,000 in brokerage fees, $5,000 in expert fees, $1,863 in costs and $375 for a non-refundable filing fee.
Rudnick, a retiree in her late 70s, had held the Apple stock for a long time and did not intend to sell it, said her attorney, Oksana Wright, a partner at Fox Rothschild.
She had put a no-trade restriction on the stock, but it was sold around March 2019. Morgan Stanley acknowledged the shares were sold without Rudnick's authorization, Wright said.
Rudnick also asked for punitive damages, which the arbitration panel denied.
"The awarded amount is very close to what was requested," Wright wrote in an email. "We are pleased with the result."
A Morgan Stanley spokesperson declined to comment. The arbitration award states the firm denied the allegations in the statement of claim and asked that it be dismissed in its entirety.
The evidentiary hearing was based in Jersey City, New Jersey, and conducted via teleconference. Finra, which runs the arbitration system that settles disputes between customers and brokers, suspended in-person arbitration proceedings last year at the onset of the coronavirus pandemic due to social distancing concerns.
During the outbreak, Finra allowed hearings to be conducted over Zoom if the parties agreed. As of this week, the broker-dealer self-regulator is again allowing in-person arbitration nationwide.
The new AI feature generates instant client portfolio talking points, slashing meeting prep time for advisors.
As Citizens expands its advisory footprint, the bank is also going after wealth trapped inside business ownership
The Forbes rankings are highly sought after by some advisors and firms for marketing purposes.
Meanwhile, an advisor tuck-in from Edward Jones expands Kestra's Washington, D.C.-area presence, and Janney deepens its Connecticut footprint with an experienced Wells Fargo advisor.
KFN Succession Center pairs advisors weighing retirement with buyers, as next-gen affordability keeps eroding industry-wide.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
