Ex-Morgan adviser wins $365K reprieve in clawback tug of war
A former Morgan Stanley adviser cut $365,000 off an arbitration award against her after successfully arguing the firm didn’t pay her full salary for three years.
The March 7 ruling reduced Potomac, Maryland broker Beverly B. Carroll’s payment to $41,000 in a rare FINRA arbitration win for a broker seeking funds from a company.
In January, FINRA ordered Carroll to pay the wirehouse over $406,000 in damages, interest and legal fees. The parties filed in September for a stipulated award arbitration in a settlement of Morgan Stanley’s claim that Carroll failed to pay a promissory note.
Morgan Stanley filed its claim with FINRA against Carroll in June 2015, more than a year after her April 2014 resignation, according to documents from the case.
Carroll denied that she had breached a promissory note and filed a counterclaim seeking $425,000 for back pay in September 2015.
An arbitration panel tossed out the counterclaim in December 2015 after Morgan’s legal team filed a motion to sever it from the case. Carroll filed her claim in a separate arbitration proceeding the following month.
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Morgan paid Carroll $278,440 in salary over three years rather than the $600,000 the company promised her, according to her claim. She said the firm also failed to honor more than $100,000 in commissions it owed her, and she sought interest fees from Morgan Stanley as well.
The company denied Carroll’s allegations. The parties’ September 2016 settlement, which a FINRA arbitrator approved in January, granted Morgan Stanley $339,000 in damages plus interest and attorney fees in connection with the promissory note claim.
A FINRA panel decided to award Carroll $365,000 in compensatory damages last week. The three arbitrators denied her request for the company to pay her legal bills for the case.
A lawyer who represented Morgan didn’t respond to requests for comment, and a spokeswoman for the company declined to comment. The attorney who represented Carroll in both proceedings did not return messages seeking comment. Efforts to reach Carroll directly were not successful.