FINRA Fines Morgan Stanley for Wealth Management Team’s Work with Former Client

Financial Advisors

Morgan Stanley and two of its brokers have to pay more than $300,000 over breach of contract and other claims arising from the departure of two advisers from broker-dealer affiliates of Huntington Bank in Ohio.

The Arbitration Board of the Financial Industry Regulatory Authority has sued Morgan Stanley and Wirehouse’s dual-registered brokers and advisors, James Patrick Liebenhoff and Frank Daniel Noville, for breach of contract and fiduciary duty. ordered Huntington Financial Advisors to pay $334,153.33 over the alleged violations. Good faith and good faith and interference with actual or future contracts or business relationships.

The decision, made on May 19, confirms that Liebenhoff and Nobile “improperly solicited their clients to transfer their accounts to Morgan Stanley even before they were officially registered with Morgan Stanley and violated their contractual obligations.” It was issued in response to an allegation that the

Morgan Stanley denied all allegations. In their counterclaims, Liebenhoff and Nobile allege they exceeded industry best practices in their retirement. Liebenhoff and Nobile demanded $430,500 in lost business income, and Nobile demanded another $14,053 plus 3% interest on lost wages. All counterclaims were dismissed.

Attempts to contact lawyers representing Mr. Liebenhoff and Mr. Nobile were unsuccessful. Morgan Stanley declined to comment, and Huntington Financial Advisors could not be reached.

Despite Huntington’s victory, the prize money received was far less than requested. Huntington Financial Advisors filed an initial claim against FINRA, a self-regulatory body for the broker-dealer industry, seeking $1.16 million in cumulative damages and $2.32 million in punitive damages.

read: Former financial adviser sentenced to 10 years in prison for fraud

This case illustrates the difficulty companies face when they hire wealth management teams from their competitors and expect their customers to migrate as well. Morgan Stanley received order from another FINRA arbitration panel in March Charles Schwab has been sued for $7.3 million in allegations that he hired two advisors from rival firms.

Mr. Liebenhoff and Mr. Nobile are part of Morgan Stanley’s wealth management team. Avanti Bridge Group Located in Dublin, Ohio. Huntington Financial Advisors reported nearly $4.3 billion in assets under management and nearly 400 registered brokers in its latest Form ADV. It was filed with the Securities and Exchange Commission on March 29.

According to FINRA’s BrokerCheck database, both riepenhof and Norville Liebenhoff will leave Huntington Financial Advisors in 2021. Prior to that, Mr. Liebenhoff worked for Huntington since 2009 and for Nobile since 1993. Neither broker disclosed any customer complaints or similar incidents in its records.

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