Lottery Winner, NFL Star Win $4.2 Mln Arb Award from Morgan Stanley
A Finra arbitration panel has ordered Morgan Stanley to pay $4.2 million to former National Football League star Asante Samuel and a Mega-Millions lottery winner for failing to supervise a Florida broker who solicited investments in nightclubs from them.
The decision, posted by the regulator the day after Christmas, found the firm liable for negligence and violation of two Finra supervision rules involving former broker Aaron Parthemer, who was has been barred from the securities industry and whose exploits have already cost Morgan Stanley and Wells Fargo Advisors millions of dollars in customer awards and settlements.
This week’s award to Samuel ($879,000) and lottery winner James Groves ($3.3 million) was just under half the $8.5 million that the pair sought following 20 hearing and prehearing sessions that ended in November. They, along with three limited liability companies and Gregory Groves, Sr., filed their initial claim against Morgan Stanley and Wells in July 2016.
The Groves and one of the limited liability entities reached a settlement with Wells Fargo Advisors last year, but the arbitrators this week denied the claims of Gregory Groves and the LLCs against Morgan Stanley, according to the award document. (Wells reportedly settled separately with Samuel and James Groves in 2016 for $1.5 million.)
Parthemer, who worked at six broker-dealers between 1994 and his dismissal by Wells in April 2015, has been barred by both Finra and the Securities and Exchange Commission.
The SEC also fined the Fort Lauderdale-based broker $160,000 for selling more than $5 million of unregistered, illiquid securities, saying he catered to pro athlete brokerage customers and investment advisory clients. (Groves won $168 million in a MegaMillions lottery in 2009. Samuel, a Fort Lauderdale native, was drafted by the New England Patriots in 2003 and was a four-time Pro Bowl cornerback during his 11-year pro football career.)
Parthemer joined Wells in late 2011 after almost two-and-a-half years at Morgan Stanley, according to his BrokerCheck history. Three customer complaints remain pending against him, but none of the 15 disclosures on his record were entered before April 2015.
A spokeswoman at Morgan Stanley declined to comment on this week’s arbitration award.