Two former brokers have hit Morgan Stanley with a $20 million lawsuit, alleging they were fired in retaliation for complaining about improper practices and violations of securities law.
Jamie Feldman-Boland and John Boland, who are married, say they witnessed trainees and interns entering trades on behalf of advisors, presumably using brokers’ access codes in violation of firm policy, the web site On Wall Street reports.
The two say they also witnessed an advisor trying to improperly get an insurance commission. They allege a business deal worth $200 million was cancelled to punish Feldman and that another advisor and the branch manager harassed Feldman. Morgan Stanley denies the allegations, On Wall Street reports.
According to a Morgan Stanley spokesperson, “These former financial advisor trainees have filed numerous unsubstantiated claims since their terminations in 2011. To date, none have been found to have any merit. We believe this latest claim is equally without merit and will be dismissed.” An attorney representing Feldman and Boland said, “My clients are fully confident in the truth of their allegations and have decided to pursue their rights.”
Feldman joined Morgan in 2008 after four years at Merrill Lynch, according to BrokerCheck. Boland joined firm in 2010 while the two were engaged, according to the complaint. The complaint said Morgan Stanley knew of their relationship. Feldman alleges that Michael Silverman, her partner for high-net-worth clients, did not meet with or serve prospective clients that she brought in, which hurt her production numbers at the firm. Feldman alleges that by January 2011 she had presented clients with more than $100 million in assets to Silverstein, but he failed to prepare investment portfolios for them. Feldman and Boland allege in their complaint that trainees and interns cold-called Pfizer and Verizon employees close to retirement to urge them to roll-over their 401(k)s to Morgan Stanley, guaranteeing them a 15 percent return. But the investments were in fact in closed-end mutual funds, which experienced sharp fluctuations in net value, according to the complaint.
When Feldman went to her branch manager in April 2011 about these and other violations she said the manager sent her away, but later asked for a list of her clients, according to On Wall Street. The following month, the manager told Feldman that the firm would not pursue a $200 million commodities deal that one of her clients wanted, according to the complaint. Feldman alleges this was in retaliation for her earlier complaints as well as a confrontation with Silverstein, who tried to claim that he was in fact the introducing broker and therefore entitled to the fees and commissions.
Eventually, the couple filed a whistleblower complaint with the Securities and Exchange Commission and met with FINRA officials. The regulator decline to comment on whether any regulatory actions resulted.
In late August 2011, Feldman was terminated for poor performance despite a pending transfer to another branch office, according to the complaint. Boland’s employment was terminated in November 2011 for similar reasons.