Morgan Stanley Sued for Illegally Withholding Compensation from Brokers
A former Morgan Stanley Wealth Management broker in Boca Raton, Florida, has filed a putative class action alleging that the wirehouse illegally withheld deferred compensation from brokers who left to join other firms.
Matthew T. Shafer, who worked at Morgan Stanley for nine years, claimed that the wirehouse’s “cancellation” of his deferred compensation when he moved to a competitor in 2018 violated the Employee Retirement Income Security Act of 1974, according to a complaint filed December 30 in U.S. District Court in the Southern District of New York.
The broker is seeking class-action certification and recovery of funds on behalf of “thousands” of former advisors who also had their deferred compensation withheld, according to the claim. Shafer, who allegedly left behind $500,000 in back pay, also alleges breach of fiduciary duty by Morgan Stanley’s compensation committee and seeks an injunction suspending the “cancellation rule.”
