Arbitrators Order Morgan Stanley Breakaway to Pay $545K
A Financial Industry Regulatory Authority arbitration panel has ordered a former Morgan Stanley broker to pay $545,000 to cover three promissory notes that came due when he jumped to a registered investment advisor, according to a decision issued in Minneapolis last week.
Sean D. Daly of Albertville, Minn., must pay the $517,285 balance on his forgivable loans plus interest, legal fees and arbitration costs, according to the award. He had been with Morgan Stanley for three years before leaving in July 2016 to become a hybrid registered investment advisor doing brokerage through LP Financial, according to BrokerCheck.
Daly, who represented himself in the proceedings and left his new firm, Great Valley Advisor Group, in December, could not be reached for comment.
The broker, an independent contractor at Great Valley, was struggling to rebuild his book of business, said James Spinelli, who runs the RIA’s recruiting efforts.
“He needed another opportunity,” Spinelli said. “You get a guy who wants to move and still has a couple hundreds thousand to pay back, and it causes problems.”
Daly filed a counterclaim against Morgan Stanley for defamation and seeking damages of $179,079, according to the arbitration award issued by three panelists who met in Minneapolis. Former colleagues and the firm “defamed him to others in the industry and to his clients,” he argued, but the panel said he failed to support the claims when asked to participate further in its hearing.
Before joining Morgan Stanley in February 2013, Daly had worked at Wells Fargo Advisors and predecessor firm A.G. Edwards & Sons, where he began his brokerage career in 2007.