A three-person Financial Industry Regulatory Authority arbitration panel on Monday ordered Morgan Stanley to pay $70,000 in compensatory damages to a former rep who was terminated by the firm in 2017 and later claimed Morgan Stanley defamed him.
Morgan Stanley declined to comment Tuesday, one day after the FINRA Office of Dispute Resolution posted the award decision on the regulator’s website. Tracey L. Gerber, a securities attorney at the West Palm Beach, Florida, office of law firm Greenberg Traurig, who represented the firm in the dispute, didn’t immediately respond to a request for comment.
Despite the FINRA panel’s decision in broker David Hugh Bindelglass’ favor, the $70,000 award was far less than he had requested.
In asserting causes of action against Morgan Stanley that included defamation and “tortious interference with prospective economic advantage,” he initially requested $800,000 in compensatory damages, $800,000 in punitive damages, $6,814 in legal fees, and expungement and amendment of his Form U5 termination that had been filed by Morgan Stanley.
As part of a joint stipulation, Bindelglass later withdrew with prejudice his defamation claim, agreed to cap his monetary request at $225,000 and said he sought expungement solely on the ground that the language on the Form U5 was inaccurate.
The FINRA arbitration panel did not award him any legal fees. However, the panel did recommend the expungement of certain language used in the Form U5.
Bindelglass was with Morgan Stanley from 2009 through December 2017, according to the rep’s profile on FINRA’s BrokerCheck website. He was discharged Dec. 20, 2017, after allegations that he “(i) acted on instructions from clients’ family members in two households who were unauthorized to transact business in the accounts and (ii) communicated recommendations and accepted authorizations from clients in two other households, despite concerns regarding the client’s mental acuity,” according to a disclosure on his profile.