NEW YORK - A federal judge has ruled that Morgan Stanley (NYSE:MS) can arbitrate in a dispute involving former financial advisers over the firm's deferred compensation plan. The decision, made on Tuesday, November 21, 2023, by Judge Paul G. Gardephe, will allow the investment bank to handle the matter privately, as opposed to a class action lawsuit that the ex-advisors sought to bring forth in court.
The group of former employees, led by Matthew Shafer, argued that their case should be heard under the Employee Retirement Income Security Act (ERISA) guidelines. They claim that Morgan Stanley's actions violated federal laws on deferred compensation after they moved to competitors like Raymond James & Associates, Ameriprise Financial (NYSE:AMP), and Stifel, Nicolaus & Co.
These claims are not without precedent; they follow a similar settlement case involving Wells Fargo (NYSE:WFC). The advisors are represented by the Ajamie law firm, which is known for its work on complex legal and financial disputes.
This ruling is significant as it sets the stage for how employment disputes of this nature may be resolved moving forward. Should Morgan Stanley succeed in arbitration, it may encourage other firms to adopt similar strategies when dealing with employment-related litigation. Conversely, if the advisors prevail, it could lead to increased scrutiny and potential changes in how deferred compensation schemes are structured and implemented within the financial industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.