Fired Morgan Stanley Broker Ordered to Pay $2.2 Mln in Note Case
A Las Vegas broker who was fired after 30 years at Morgan Stanley has been ordered to repay almost $2 million in deferred bonuses and interest, according to an arbitration panel decision issued on Wednesday.
The three-person Financial Industry Regulatory Authority panel upheld Morgan Stanley’s claim for payment of the $1.62 million balance on his promissory note and ordered him to pay an additional $336,000 in interest, $150,000 in attorneys’ fees and $21,056 in costs. The money was tied to special compensation agreements, growth award and promissory notes, according to the award.
Michael Novick, who represented himself, did not return a call for comment made to Global Trust Group, where he creates investment strategies for short-term property tax liens, according to the company’s website.
He was discharged by Morgan Stanley in 2014 for failing to disclose “communications with clients regarding an outside investment adviser,” according to his BrokerCheck history, and is no longer registered as a broker.
At Global Trust, he is working with “a mispriced asset class Wall Street hasn’t stampeded into yet,” the firm’s website says. It also credits him with having built one of Morgan Stanley’s “largest investment practices” and with devising a strategy that was used in a $230 million Morgan Stanley Van Kampen Insider Buy Strategy Unit Trust.
In the arbitration proceeding, Novick filed a civil rights counter-claim against Morgan Stanley for $20 million, saying the firm discriminated against him, breached agreements involving “his intellectual property” and engaged in “discriminatory and retaliatory conduct,”
The arbitrators denied his counterclaim “in its entirety.”
Novick rebutted Morgan Stanley’s claim for firing him, saying in his BrokerCheck commentary that the firm had approved using the outside investment adviser to manage certain accounts he serviced but was retaliating against him for raising concerns about a trade-error policy. He also asserted that the firm timed his dismissal to coincide with the Jewish High Holidays so that he was not able to respond to its allegations.
“If Morgan Stanley had completed its investigation, it would have found that the representative had no dealings or involvement with the outside investment adviser that in any way violated any rule, regulation or company policy,” he wrote. “The representative further believes that his termination was unlawful for numerous reasons and violated a series of applicable laws.”