Finra arbitrators ordered Morgan Stanley to pay $782,272 for unauthorized transactions in an estate account.
The estate of Joan Ellard — through its personal representative Stephanie (nee Ellard) Epstein — claimed that Morgan Stanley ignored rules laid out by a court for how funds in the estate were to be handled.
“The causes of action related to [the estate’s] allegations that, at a time when [Morgan Stanley] had actual knowledge of the limits on a limited conservator’s authority, it transferred large sums of money from Joan Ellard’s account through unauthorized transactions at the behest of the limited conservator, even though these transactions exceeded the clear limits set forth in a court order,” the award issued Friday states.
The estate asserted that Morgan Stanley breached fiduciary duty, in addition to suitability, know your customer and diligence rules. It also cited breach of contract and negligence, among other causes of action.
A three-person Financial Industry Regulatory Authority Inc. arbitration panel found Morgan Stanley liable and awarded the Ellard estate $554,834.70 in compensatory damages and $227,438.11 in prejudgment interest.
The arbitrators denied the estate’s request for punitive and treble damages and attorneys’ fees.
The estate had sought $1,238,518 in total compensatory damages, which included $547,082.63 in disbursements and $691,435.67 in prejudgment interest, punitive damages of $2.5 million and post-judgment interest. Morgan Stanley said it was responsible for $154,740 in damages, according to the award.
Morgan Stanley denied the estate’s allegations. It also asked to recover defense costs and sought expungement of the claim from the record of John Rochester, a broker at the firm who was an unnamed party. The arbitrators denied the firm’s claims.
As is typical, the Finra arbitrators did not explain the reasoning behind their decision.
The estate’s attorney, Anthony Fata, did not respond to a request for comment. Morgan Stanley declined to comment.
Medicare scam, pandemic benefit theft, offshore tax evasion — federal prosecutors are casting a wide net.
Report finds that pension income acts as a financial lifeline for retirees facing late-life shocks and raises urgent questions about the DC-only future.
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.
With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
