Morgan Stanley Claws Back $600k in Notes from Fired Florida Broker

June 11, 2021

Morgan Stanley Wealth Management was thriving in its bid to reclaim roughly $600,000 in promissory notes, plus desire, from a Florida broker it fired in January for allegedly failing to verify trades with clientele, according to an arbitration award finalized this week.

A Economic Business Regulatory Authority arbitrator dominated Thursday that Thomas James Hagan, a 36-yr broker who experienced been with the wirehouse due to the fact 2015, need to pay out the principal stability of 4 “fully-executed” notes totaling $577,561.54, in addition interest of $16,126.03, not like any extra curiosity accrued considering the fact that May 27. He was also requested to pay out $7,882 in attorneys fees and other fees, according to the award.

Hagan experienced been terminated from Morgan Stanley adhering to “allegations that he exercised discretion/failed to validate all trades with clientele,” according to a January 11 ‘disclosure’ on his BrokerCheck profile.

Hagan, who has not registered with one more Finra member firm because his discharge from the wirehouse, could not be achieved for comment. He did not react to notices from Finra dispute resolution expert services or make an look in the arbitration proceedings and experienced no attorneys symbolizing him in the make a difference, the award document stated.

A spokesperson for Morgan Stanley, which had submitted its assertion of claim on March 2, did not answer to a request for remark on the award or if Hagan has indicated he will shell out.

The notes at difficulty day back to November 2015, when Hagan joined the organization, with the most the latest executed in February 2017, according to the award document.

Hagan commenced his brokerage vocation in 1984 with A.G. Edwards, joined Merrill Lynch in 1987 for a 19-12 months remain, and left in 2006 for Wells Fargo Advisors. He then moved nine many years afterwards to Morgan Stanley, in accordance to his BrokerCheck profile. 

Key brokerage corporations, like Morgan Stanley, typically spend top brokers signing bonuses structured as ‘forgivable’ financial loans that can be multiples of a brokers’ once-a-year revenue, but they can require that brokers remain at the agency for upwards of a ten years for the financial loans to be forgiven.

Morgan Stanley experienced $3.24 billion in personnel loans exceptional as of the conclude of 2020, up 8.7% from $2.98 billion the year before, according to its 2021 annual report. The calendar year-more than-yr balance boost was an indicator that the wirehouse has revived its choosing endeavours for higher-manufacturing veteran brokers due to the fact stepping back from the fray in 2017, as it followed sequential declines from 2012 as a result of 2019.

In a different promissory note scenario in January, a previous Morgan Stanley broker in Boca Raton was ordered to repay a $984,000 promissory observe balance tied to his resignation in July 2020.

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