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Industry Spotlight > Broker Dealers

Morgan Stanley Fires Brokers Over Legacy Account Payments

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photo of Morgan Stanley signs in New York from Bloomberg Morgan Stanley’s New York headquarters (Photo: Bloomberg)

Morgan Stanley has fired several brokers over alleged abuses in its Former Advisor Program that enables brokers retiring from the firm to split fees and commissions with brokers who inherit their client accounts if they don’t compete after leaving the firm.

The exact number of brokers terminated by Morgan Stanley was not immediately clear. But AdvisorHub, which first reported the story, said about 10 brokers were fired in recent days after a nationwide investigation into brokers who were believed to be recording trades in the program incorrectly.

Morgan Stanley declined to provide specific details. A spokesperson only told ThinkAdvisor by email Thursday: “We expect Advisors who enter into partnership agreements to abide by those agreements and we are committed to ensuring that retiring Advisors receive what they are entitled to.”

It is indeed up to Morgan Stanley and other firms to enforce sunset programs like this, according to Danny Sarch, president of Leitner Sarch Consultants in White Plains, New York.

“Any of these sunset programs create a contract signed by the retiring advisor, the company, and the inheriting advisor,” he told ThinkAdvisor by email Friday. “It’s the company’s obligation to enforce the contract since the retired advisor will not have any access to the commissions and fees generated by their legacy book after they have left the firm.”

‘No Warning’

Marc S. Dobin of Dobin Law Group in Jupiter, Florida, confirmed to ThinkAdvisor Thursday that he is representing John Patrick Miller, a $1.5 million-producing broker in Ponte Vedra Beach, Florida, who was one of the brokers fired by Morgan Stanley.

Miller allegedly recorded certain 2017 trades incorrectly at the request of a senior broker on his Morgan Stanley brokerage team, according to Dobin. Miller is considering filing a wrongful termination claim, Dobin said.

Miller had been with Morgan Stanley for his entire nine-year career before being fired by the firm last week, Dobin noted, adding: “The firm talked to him at some point prior to this about it. But there was no warning that he was going to be fired.” Miller “started with Morgan Stanley as a receptionist” before becoming a broker, Dobin said.

Miller’s report on the Financial Industry Regulatory Authority’s BrokerCheck website includes no disclosures.

2 More Brokers

Two other reps that AdvisorHub reported were among the brokers fired by Morgan Stanley are: Blake Ridenour of Sarasota, Florida, who the report said was producing about $1.5 million and also allegedly miscoded some revenue; and Jazmin Gabriela Carpenter of Los Angeles, California, who inherited a $450 million book of business from a retired broker.

Ridenour joined Morgan Stanley in 2010 after about one year at UBS Financial Services, while Carpenter joined Morgan Stanley in 2009 after about two years with Citigroup Global Markets, according to their BrokerCheck reports. Neither of them had any disclosures on their reports. Ridenour and Carpenter did not immediately respond to requests for comment.

None of the BrokerCheck reports indicated that Miller, Ridenour or Carpenter had left Morgan Stanley.


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