When Douglas Garban left Salomon Smith Barney in 2003 with a debilitating heart condition that ultimately led to a heart transplant, he claims he had an agreement with a fellow broker who took over his book of business that they would split the business 50-50 if and when he ever returned to work.
It took a while, but Mr. Garban sought to return to work last year, but claims the broker, Edward Washell, and Morgan Stanley, which acquired Salomon Smith Barney in the interim, refused to honor the agreement. He is suing both Mr. Washell and Morgan Stanley, seeking $2 million in damages.
Mr. Garban, now 53, began his career in the securities industry in 1987 and worked for Salomon Smith Barney from 1993 to 2003,
according to his BrokerCheck report. After his heart transplant, Mr. Garban became the full-time caregiver of his two young children when he and his wife divorced, according to a statment of claim filed with the
Finra Dispute Resolution, where the case is being heard.
When Mr. Garban contacted Morgan Stanley and Mr. Washell last year "about transitioning back to his clients," he claims he was "given the run around for a while," according to the claim. Eventually, Morgan Stanley and Mr. Washell said that "they would not honor the agreement," the complaint alleges. He now works for Merrill Lynch in State College, Pa.
Mr. Garban declind to comment.
"Basically, he had built the business and introduced all his clients to Ed Washell and another partner who is no longer part of the team and transitioned the clients," said Kristian Kraszewski, Mr. Garban's attorney. "He didn't take any money for the book, and the plan was always for him to come back. It took longer than expected."
Mr. Garban had a genetic heart degeneration, Mr. Kraszewski said. "It was very serious. Fortunately, the transplant was a success and he was healthy and able to work again. But the career he built with the backstop of this agreement didn't come to fruition."
A spokeswoman for Morgan Stanley, Margaret Draper, declined to comment. Mr. Washell did not return a call to comment. Hearings are scheduled to begin in May, said Mr. Kraszewski.
According to Morgan Stanley, Mr. Washell produces between $500,000 to $600,000 annually in revenue and receives more than half his commissions from clients he developed after Mr. Garban left the industry. According to its counterclaim, Morgan Stanley had no obligation to hire Mr. Garban in 2016 and his "claims to the contrary are frivolous."
"The notion that Garban had some type of a 'lifetime right' to come back into the securities industry and share commissions with Washell on a 50/50 basis is ludicrous," Morgan Stanley charges.
