Morgan Stanley suffered rebuke in its attempt to have a court of appeals overturn a lower judge’s ruling that the deferred compensation it pays advisors is protected by federal retirement law.
The U.S. Court of Appeals for the Second Circuit found Wednesday in an unpublished opinion that it lacks jurisdiction to intervene in a dispute between Morgan Stanley and a group of its former brokers led by an ex-advisor named Matthew T. Shafer, who left in 2018 to join Raymond James. Shafer initially filed a putative class action suit in 2020 arguing he’s still owed more than $500,000 for work he did at the firm before leaving. Nearly two years later, he was joined by 11 other former Morgan Stanley advisors in a class action claiming they’re owed nearly $4 million in total.
Wednesday’s appellate decision means the dispute will now proceed before an arbitration panel provided by the Financial Industry Regulatory Authority, the broker-dealer industry’s self-regulator.
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