Morgan Stanley is hitting back against a former broker who is seeking to vacate a $1.2 million FINRA arbitration award on the grounds that one of the arbiters may have had conflicting interests.
The firm filed a motion in a federal court in New York seeking to confirm the award in favor of Morgan Stanley, arguing the ex-advisor, Rachael Leigh Konz, did not challenge the proceedings until after the panel ruled against her, court records show. The motion is asking the court to throw out her petition to vacate the award filed in June.
“First of all, when you move to vacate you absolutely cannot attack the merits of the arbitration,” says Konz’s attorney, Joshua Brinen, of the New York-based Brinen & Associates. “What we’re saying is something was improper in the actual proceeding itself, and therefore, to render a decision is in manifest disregard of the law. We’re asking for a do-over.”
Working closely with firms that negotiate promissory notes could have swayed the arbitrator’s decision, the petition argues.
In Morgan Stanley’s motion, the firm argues that Konz agreed to the panel before the award was handed down and waited to dispute the panel after the award went against her. “An initial pre-hearing conference was held and the parties accepted the composition of the panel, including arbitrator Mabry,” according to court documents filed by Morgan Stanley.
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Bill Pappas is MetLife's Head of Global Technology and Operations, and is a Corporate Officer and a member of the company's Executive Leadership Team. In this role, he directs a team of more than 38,000 people responsible for technology development, infrastructure, information and cyber security, data strategy and analytics, customer service, operations, crisis management, business continuity and procurement for all lines of business, serving more than 90-million customers across 40+ countries around the world.
Pappas joined MetLife in 2019 from Bank of America, where he was the head of operations for the consumer, small business, wealth management and private banking businesses. In this role, he directed a team comprised of more than 50,000 people delivering integrated service and operations solutions to approximately 63-million consumers and clients. In addition, Pappas led the global business services team that provided integrated technology solutions across Bank of America.
Previously, Pappas was chief information officer for Bank of America's global wholesale banking business, head of global capital markets operations, and head of technology and operations for the Europe, Middle East & Africa, Latin America and Asia Pacific regions. He also served as the global treasury payment operations executive based out of London.
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An attorney for Morgan Stanley, Gregory Galterio, declined to comment.
“It doesn’t matter, because that’s not the point,” Brinen says, regarding when Konz decided to question the legitimacy of the arbitrators on the FINRA panel. “FINRA should have stopped it, and reset the arbitration.”
Brinen admits vacating a FINRA arbitration award is “exceedingly rare.”
Konz is an 18-year industry veteran and is currently registered with Merrill Lynch. She began her career with Citicorp Investment Services in 1999 and moved to Merrill Lynch a year later, per FINRA BrokerCheck records. She had stints at Wells Fargo and BancWest Investments, before landing at Morgan Stanley in 2013, per BrokerCheck.
