Morgan Stanley wins $1M clawback from ex-broker: FINRA

Register now

A former broker who was terminated from Morgan Stanley must pay the wirehouse $1.02 million in compensatory damages over an unpaid promissory note, according to a recent FINRA arbitration award.

Kimberley Aylesworth had worked two years for the wirehouse when she was let go in December 2015, according to FINRA BrokerCheck records. The terms of a promissory note required her to repay what was owed on the note after her termination, Morgan claimed in the FINRA arbitration case.

A Jan. 31 FINRA arbitration decision awarded the firm $1,017,648 in compensatory damages, which includes the unpaid note balance and interest. No reason is given in the arbitration award or in BrokerCheck for Aylesworth’s termination.

Aylesworth said she was wrongfully terminated by Morgan Stanley, but declined to get into specifics. She also said that she did not agree to settle the arbitration case, although the award indicates both parties had entered into an agreement.

A Morgan Stanley spokeswoman declined to comment.

Aylesworth had worked out of Morgan’s Atlanta office and had joined the firm in August 2013. Prior to that she worked five years at Merrill Lynch, according to BrokerCheck. She worked a previous stint at Merrill from 2002 to 2004, and began her career two years prior to that with Park Avenue Securities.

Aylesworth, who is not currently registered as a broker, currently works as a business manager for FirsTrust, an independent wealth management firm in Atlanta.

Morgan also recently clawed back nearly $1 million from three other former advisers.

From recommending wrong share classes to cherry-picking allocations, these are the pitfalls advisers should avoid.
1 Min Read

In one of the awards made last month, a broker kicked out of the industry for taking loans from clients without approval was to pay the wirehouse more than $480,000. Two other ex-brokers were to pay Morgan a combined $524,000 in arbitration cases relating to unpaid promissory notes.

For reprint and licensing requests for this article, click here.
Arbitration Wirehouse advisors Wirehouses Penalties and fines FINRA Morgan Stanley Wealth Management Morgan Stanley