Fired Morgan Stanley Broker-Restaurateur Files $30 Mln Complaint
Kerry Moy, a million-dollar producer with a reputation as a bon vivant restaurateur and musician in Los Angeles, has filed an arbitration complaint against Morgan Stanley seeking $30 million for wrongful termination, unjust enrichment and other claims.
The termination cost Moy his 34-year career as a wirehouse broker and more than $100 million of assets from customers reluctant to follow him to Western International Securities, where he is now registered as an independent investment adviser, according to Robert Girard, a plaintiffs’ lawyer who is representing him.
“This had nothing to do with his securities career, but they panicked and rushed to judgment to get themselves dismissed from a lawsuit between Moy and one of his business partners concerning restaurants,” Girard said of Morgan Stanley. “They were hit with a trumped-up failure to supervise charge and, suspiciously, his employment is terminated after that.”
A Morgan Stanley spokeswoman did not immediately respond to a request for comment on the arbitration complaint that Moy filed last Thursday.
Moy’s BrokerCheck record includes a $14 million lawsuit in December 2018 in Los Angeles County Superior Court naming Morgan Stanley as a cross-defendant and alleging “misrepresentation” about investments by a limited partnership Moy was involved with.
The broker’s dismissal appears to represent a change in the litigation-sensitive securities industry for successful brokers who were often protected from compliance peccadillos before the financial crisis.
“I’ve seen major producers fired after 20 to 30 years if the firm decides he or she could expose the firm,” Girard said.
Moy’s restaurant career was widely publicized in several national and local articles, and was likely known by Morgan Stanley when they recruited him in 2012 from Merrill Lynch, where he had worked since the start of his brokerage career in 1984, according to Girard. The firm also had earlier approved the outside business activities that he had disclosed, he said.
In addition to seeking $10 million in compensatory damages for “unjust enrichment” by holding on to much of Moy’s book, Morgan Stanley owes damages based on contractual law and under California labor code public policy law due to a “makeshift” investigation and the “rush to judgment,” according to Girard’s account of the arbitration filing.
It also seeks dismissal, or pro-rata diminution, of the $350,000 promissory note balance Moy owes Morgan Stanley, and expungement and re-proposal of the cause and explanation of his employment separation on his U-5 form.