Broker and Adviser News: Morgan Stanley Sues Ameriprise Broker, Former UBS Broker Alleges Investor Risk Levels Were Mischaracterized, and Ex-Bank of America Merrill Lynch Trainees Seek Overtime

Morgan Stanley Accuses Ex-Broker, Now With Ameriprise, of Trying to Take Clients
Morgan Stanley Wealth Management is suing one of its ex-brokers, John McCallion, who is now with Ameriprise Financial Services (AMP). The wirehouse claims that McCallion went into Morgan Stanley’s (MS) computer system before leaving the firm and changed his clients’ phone numbers so he could take their business with him.

The firm contends that while McCallion gave it a list of his clients’ information, he put the data on a USB drive that could not be opened on Morgan Stanley’s computers because of security issues. The Ameriprise broker has consented to a temporary restraining order that blocks him from pursuing the firm’s clients. He also is facing a FINRA arbitration claim over the matter. McCallion had at first tired to argue against the temporary order and he denied taking the confidential list or trade secrets.

Ex-UBS Broker Accuses Firm of Hostile Work Environment, Misrepresenting Investor Risk Levels
Meantime, in another FINRA arbitration case, an ex UBS Wealth Management Americas (UBS) broker wants a federal court judge to overturn the award ordering him to pay back over $300,000 in bonus money. Michael Hadden claims that UBS made it “impossible “for him to keep working there because of the way the firm marketed and sold structured products to investors that were supposedly conservative, even though it was mislabeling them “moderate” in terms of risk tolerance to avoid penalties and restitution.

Hadden also contends that UBS used negative consent letters that charged high investment management fees. He says that UBS’s “inhospitable work environment,” via its practices as they related to employees, customers, and regulators, gave him good reason to leave the firm without paying back promissory notes.

It was last year that FINRA rejected his counterclaim for $1.3 million in damages, siding with UBS to claw back his bonus. Hadden, however, said that he wasn’t given enough time to demonstrate his claims of an inhospitable work environment during the arbitration process.

Former Trainees for Bank of America’s Merrill Lynch Sue for Overtime
Two former financial-adviser trainees of Bank of America Corp’s (BAC) Merrill Lynch unit are suing the firm for overtime. They are accusing the companies of Fair Labor Standards Act violations for not paying overtime for work that they did on the weekends and during long nights, as well as for 10-hour days. They want to represent over 100 trainees that have worked in the firms’ Practice Management Development program since 8/5/2011. Damages could exceed $5 million.

According to Zaq Harrison and Andrew Blum, Bank of America and Merrill did not properly compensate trainees during the program’s development stages even though they were expected to generate leads on possible bank clients. They also claim that the two companies violated the wage-and-hour law in Maryland.

Bank of America, Merrill Trainees Sue Seeking Overtime, March 5, 2015

Morgan Stanley sues former broker, now at Ameriprise, over recruiting hijinks
, Investment News, March 5, 2015

Hadden v. UBS Financial Services Inc., Justia, February 18, 2015

More Blog Posts:
Morgan Stanley, DOJ Arrive at $2.6B Mortgage Bond Settlement, Stockbroker Fraud Blog, February 25, 2015

Bank of America Used Subsidiary to Finance Trades, Helped Hedge Funds, Others, Avoid Taxes, Institutional Investor Securities Blog, February 11, 2015

DOJ Investigating UBS Over Losses Related To Firm’s V10 Enhanced FX Carry Strategy, Stockbroker Fraud Blog, February 17, 2015

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