Two former pro athletes, one from the NBA and the other the NFL, won an $819,000 arbitration award Monday against Morgan Stanley Smith Barney in a claim that focused on the firm's negligent supervision of a former broker.
Keyon Dooling, a first-round pick and former guard, played in the NBA for 12 seasons. John St. Clair, a former offensive tackle, played professional football for 11 seasons. Their broker was Aaron Parthemer, according to a press release from Curtis Carlson, the attorney for the two claimants.
Mr. Parthemer was barred from the securities industry last year by the
Financial Industry Regulatory Authority Inc.,
according to his BrokerCheck report.
Both Mr. Dooling and Mr. St. Clair invested in Global Village Concerns, a sportswear company, while only Mr. Dooling invested in Club Play, a Miami Beach nightclub. Both investments became worthless, according to the release.
Mr. Parthemer was not named as a defendant in the arbitration award.
(See:
Finra bars Wells Fargo broker who ran Miami nightclub
“These guys worked incredibly hard for their money, and it is gratifying that the arbitrators found Morgan Stanley liable for failing to properly supervise its financial adviser,” said Mr. Carlson in a statement. “Too often, professional athletes fall victim to financial mismanagement, and this is one of the few instances where an athlete has been able to recover his money.
“We are disappointed in and disagree with the arbitrators' decision in this case,” said Morgan Stanley spokeswoman Christine Jockle, in an email.
Mr. Parthemer was barred from the securities industry for performing outside business activities that his firm was not aware of or had given approval for, according to his BrokerCheck report. Those businesses included allegedly running a hip-hop dance club in South Beach, according to a settlement letter from last year.
Mr. Parthemer neither admitted to nor denied Finra's finding in the settlement.
At the time he was barred, Mr. Parthemer was employed by
Wells Fargo Advisors. He was registered with Morgan Stanley Smith Barney from 2009 to 2011, according to BrokerCheck. He has three pending customer disputes, according to BrokerCheck.
