Young Broker Honored by Morgan Stanley in February Sues Over Pay Policies
A Morgan Stanley rookie who received “Pacesetter” recognition club status this year for his client-service accomplishments filed a class-action lawsuit against the firm on Monday, alleging violation of California laws for failing to cover his parking, client entertainment, trading ticket, licensing fees and other “ordinary” business expenses.
Brandon Harvey, who began his brokerage career with Morgan Stanley four-and-a-half years ago before leaving in March to become an independent broker with LPL Financial, alleged that his former employer made unlawful pay deductions, failed to provide accurate itemized wage statements and failed to reimburse reasonable and necessary business expenses, according to the complaint that was filed in U.S. District Court in the Northern District of California.
In February, Harvey was named to Morgan Stanley’s “Pacesetter’s Club,” a recognition for brokers who in their first five years with the firm “demonstrate the highest professional standards and first-class client service,” according to a firm press release.
“Just because things are going well for the broker doesn’t mean that the broker-dealer should get a pass on complying with the law,” said Edward J. Wynne, a lawyer in Larkspur, CA, who is co-counsel to Harvey. “This is a hot-button issue for a lot of registered reps.”
The case is the fourth putative class-action lawsuit that Wynne has filed against big firms over expense policies, including one he brought against UBS Financial Services last month. All cite California labor and business conduct laws.
Wells Fargo Advisors in April agreed to settle one of the cases for $9.5 million, according to court filings. Almost 2,200 current and former Wells brokers will receive an average of around $2,800 in the settlement, Wynne said.
Harvey’s claim against Morgan Stanley cites an array of out-of-pocket costs that brokers have to cover, including “travel, parking, mileage, education, client and prospect entertainment, and marketing expenses, as well as ticket charges, equipment costs, licensing fees, subscriptions, losses due to trading errors, and wages paid to support staff.” Many of the costs are deducted from financial advisors’ wages in violation of California’s Business and Professional Code, the lawsuit says.
A Morgan Stanley spokeswoman said she could not immediately comment on the case.
Harvey, whose LinkedIn profile describes him as a “family wealth advisor” with a 2010 undergraduate degree from the University of California at Berkeley and master’s degree in international political economy from The Chinese University of Hong Kong, did not return several calls for comment.
“Having come from a family that consistently focused on the now, and who was paralyzed by inaction on longer-term planning, I developed the belief that inaction creates the room for unwanted results,” his LinkedIn profile says. “Based on this experience, I have decided that taking action in life is paramount.”