(Reuters) - Morgan Stanley must pay $1 million to a former manager who alleged he was wrongfully terminated by the firm, according to a securities arbitration ruling.
Gregory Torretta, a 29-year industry veteran, filed the claim in 2011, initially seeking $4.5 million in damages.
The decision marks an unusual instance of a securities industry professional winning a wrongful termination suit against a brokerage, say lawyers.
A Morgan Stanley spokeswoman said the brokerage disagrees with the decision and is considering its options.
The dispute between the brokerage and Torretta, who managed a two-branch Morgan Stanley complex in Garden City, New York, stemmed from his oversight of another manager who was not adequately doing his job, according to Marc Dobin, a lawyer in Jupiter, Florida, who represented Torretta.
That manager became frustrated by the oversight process and sent Torretta an email to complain. The manager, who copied Torretta’s boss on the message, also implied in writing that Torretta had discussed leaving the brokerage and suggested that the underperforming manager join him, according to Dobin.
Torretta denied having such a discussion with the manager. But the allegation, since revealed to Torretta’s boss, gave rise to abrupt action against Torretta, according to Dobin. Morgan Stanley gave him the choice of voluntarily resigning or being terminated, according to Dobin. Torretta resigned and now works for Ameriprise Financial Services, Inc, according to a regulatory filing.
The panel, as is customary, did not explain the reasons for its decision. But Morgan Stanley’s own procedures for handling such a dispute were a key factor in the case, Dobin said. Torretta’s case hinged on the allegation that Morgan Stanley did not follow those procedures, which required, among other things, certain meetings and possible involvement of the human resources department, Dobin said.
The underperforming manager was later fired.
“We view this as a vindication,” Dobin said.
Reporting By Suzanne Barlyn; Editing by Nick Zieminski