Investment Advisor

Morgan Stanley Brokers Opt Out of Deferred Comp Class Action

As the proposed class action complaint against Morgan Stanley for its deferred compensation program winds its way through the Courts, former Morgan Stanley brokers are asking if they are better served by filing their own claims in arbitration.

In many cases, the answer is yes. 

Delays in Court Cases

The proposed class action was filed in New York in December 2021. As of today, March 30, the defendants have still not filed an answer, after three months. 

The Morgan Stanley defendants instead filed a motion to compel arbitration, arguing that the claims need to be heard in a FINRA arbitration. While the parties wait for the judge to decide the motion, the case is stayed. Nothing is happening.

If the case had been filed as an arbitration, by now arbitrators would have been appointed, and a hearing date set, probably for December 2022.

Court vs. Arbitration

While there are numerous reasons to file this case as a class action, there are always issues with class actions, and issues with bringing cases in court. Most of those issues are time and money.

I have represented parties in sophisticated federal court litigation, and in hundreds of FINRA arbitrations. There is no doubt that court is better for some cases, particularly where extensive discovery is needed from the other side. Arbitration just isn’t the forum if you need lots of documents or testimony from the other side.

However, the Deferred Compensation cases are based on documents we already have – our client’s compensation reports, and the plans themselves.

Arbitration is at least as fair as court, and certainly more expeditious. Brokers realize that and we are receiving calls from former Morgan Stanley brokers whose deferred compensation was withheld when they resigned from Morgan Stanley.

More Information

We are interested in speaking to other former Morgan Stanley brokers, as well as former Wells Fargo brokers regarding their experience with the deferred compensation programs.

Call our firm at 212-509-6544 or email us at represent advisors in all 50 states.

Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.

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