Jailed ex-Morgan Stanley New Jersey Broker Ordered to Pay Firm $300,000
An arbitration panel has ordered a jailed ex-Morgan Stanley broker to repay $300,000 of upfront bonuses owed to the firm because of promissory notes he signed.
Barry F. Connell, who worked at the firm from 2008 until his dismissal last November, was arrested in February on charges of stealing $5 million from his clients and is incarcerated at the Metropolitan Detention Center in Brooklyn pending trial on 15 counts of fraud and embezzlement.
Connell, 51, who represented himself in the arbitration proceedings, could not be reached for comment. A lawyer representing him in the criminal proceedings, Amy Gallicchio in New York, did not return a request for comment.
A sole Financial Industry Regulatory Authority arbitrator in New York awarded Morgan Stanley and its MSSB FA Notes Holdings entity $293,000 plus interest and $4,025 in costs, relating to four promissory notes to the firm for four promissory notes in addition to $7,000 for Morgan Stanley’s attorneys’ fees.
Whether Morgan Stanley will be able to collect the money is a question, given Connell’s status and the millions of dollars of arbitration awards that are , an issue that Finra Chief Executive Robert Cook said the self-regulatory organization plans to address.
Connell joined Morgan Stanley in New Jersey in 2008 from UBS Financial Services, according to BrokerCheck. He was fired in November 2016 for “unauthorized withdrawals and transfers of funds from client’s household accounts to third-party payees, which appear to be for the benefit of the former registered representative.”
In addition to the criminal charges, which carry a potential sentence of 30 years, the Securities and Exchange Commission in February filed charged Connell with fraud, citing 100 withdrawals from client accounts using falsified authorization forms and false attestations of having received verbal authorization. The SEC is seeking disgorgement and civil penalties.
Connell allegedly used the money for a country club membership, private jet service and a year’s worth of rent.
A Morgan Stanley spokeswoman did not immediately return a request for comment or questions about whether it expected to be repaid.