Ex-Morgan Stanley Manager Ousted After Broker Arrest Clears His Record
A former Morgan Stanley branch manager forced to resign following fraud and embezzlement charges against a broker in a New Jersey branch can clear his record of a complaint that he failed to supervise the advisor.
Morgan Stanley permitted Crystal to resign following “public revelations” about the misconduct of former broker Barry Connell, an 18-year wirehouse veteran who pleaded guilty to stealing from clients in December, according to the BrokerCheck records of six advisors. Connell was barred by Finra in 2017 for failing to pay Morgan Stanley $300,000 owed on “forgivable loan” promissory notes that he had signed during his employment.
Last week’s decision was bittersweet for Crystal. Morgan Stanley wrote in its U-5 dismissal form that it did not believe he was aware of the broker’s misconduct but mutually agreed to the termination.
“I’m glad to have it behind me and over with,” Crystal wrote in a text message that reiterated the arbitration panel’s finding that he was not Connell’s supervisor at the time of the alleged events.
A spokeswoman at Morgan Stanley declined to comment.
Crystal, who had been a wirehouse branch manager for 17 years when he was put on leave of absence and ultimately fired, is now head of recruiting for independent broker-dealer network Atria Wealth Solutions, a firm founded by former Morgan Stanley executive Doug Ketterer. He had managed Morgan Stanley’s Paramus office.
“Respondent Jeffrey Sean Crystal did not manage or supervise the branch at which Barry Connell worked during the relevant period,” the arbitrators wrote.
The expungement awards to Crystal, George F. Batelli, Denise Kelly, Richard Less, Ardell Roan and Jennifer Salmon follow a $1.35 million settlement that Morgan Stanley reached in May with two relatives of Connell, including his mother, and a related irrevocable insurance trust.
They had filed their claim for at least $2.19 million in December 2017, alleging negligent hiring, negligent retention, negligent supervision, breach of fiduciary duty, breach of contract and fraud.
The Connells did not object to the expungement requests, according to the arbitration award filing. Kim Michael, a partner at Wechsler & Cohen in New York who represented the claimants, declined to comment on the case.