Morgan Stanley Boots $6-Million New York City Producer
Morgan Stanley Wealth Management has given pink slips to three brokers on a high-producing New York City team whose leader’s client trading activities were being investigated internally.
Michael F. Paesano, who has been with UBS Financial Services and Morgan Stanley for the past 11 years, was discharged in December over “concerns” regarding his “exercise of discretion and investment strategy,” according to a U5 termination form filed with regulators on Friday.
Two other brokers on the five-advisor team that marketed itself as the PC Wealth Management Group—Jeffrey Cadan and Richard A. Perkins—also were terminated in December, according to two people familiar with their practice who spoke on condition of anonymity.
David Robbins, a lawyer for Paesano and Cadan, declined to comment. In a brief phone call, Perkins declined to comment.
Paesano, who has accumulated 15 customer complaints and one tax lien since 2008, according to his BrokerCheck record, did not return a message left with a person answering the phone at his Long Island, New York, home. He first registered as a broker with bond trader County Natwest in 1987.
“A key differentiator for our team is that we manage the majority of our assets in house and will leverage external managers when appropriate,” Paesano’s group wrote in a brochure that has been removed from the PC Wealth Management former website. It lists Paesano as the group’s senior portfolio manager and a member of the firm’s top-tier “Chairman’s Club” in 2012, the year after he moved from UBS.
Paesano’s team was generating $6.4 million in annual fees and commissions when they joined Morgan Stanley in May 2011 from UBS Wealth Management, according to numerous trade industry publications that heralded their arrival at the time. At UBS, the team included 17 brokers who oversaw some $1.3 billion of client assets, according to its now-defunct Morgan Stanley webpage.
A Morgan Stanley spokeswoman declined to comment on the team or its current production.
Paesano, who served as a co-chair of an Actors Fund annual gala honoring actors Al Pacino and Bebe Neuwirth while he was at UBS, reached settlements in 10 of the 15 customer disputes listed on BrokerCheck, while five were denied. Many of the claims involved structured notes issued by Lehman Brothers, the source of widespread losses on Wall Street during the financial crisis.
Morgan Stanley paid $245,000 to settle the most recent claim against Paesano and Perkins for $1 million of unsuitable investments pressed by a client.
In his BrokerCheck comment on the settlement, Paesano “vehemently denie(d) any allegations of wrongdoing,” adding that he was not involved in the decision to settle and said the client was an “extremely sophisticated investor…who understood the risks associated with the investment strategies employed in her accounts.”
In June 2015, Paesano reported that he had learned of a lien made against him from Trump Plaza Associates in Atlantic City in 2004 for $7,211, according to his regulatory filings. In September 2016, he reported a $143,000 tax lien from tax year 2010.
Cadan, whose $1.7 million Westport, Conn., home was profiled last April by the Wall Street Journal, has 12 disclosure events on his record. The most recent, for unsuitable investments in 2012, was settled for $170,000 of the $377,000 requested, according to BrokerCheck.
-Jed Horowitz contributed reporting to this story.