Former Morgan Stanley broker Ivan Gefen has been ordered to pay the wirehouse $2.6 million after he contested his termination, Financial Industry Regulatory Authority (Finra) documents show.
Gefen, who is currently employed by Newbridge Securities, according to Finra’s BrokerCheck, left Morgan Stanley in 2016. The Boca Raton, Fl.-based broker first brought action against the wirehouse in April of that year, alleging wrongful termination and seeking over $5 million in damages. Gefen later claimed that the firm ended his employment without just cause and slandered him, ‘destroy[ing] his career in the securities industry,' according to the arbitration decision.
Morgan Stanley responded by filing a counterclaim in an attempt to recoup around $2.25 million from Gefen that it had given him in a series of three promissory notes, plus interest.
On January 4, a Finra arbitration panel upheld Morgan Stanley's claim that Gefen was liable for $2.58 million in compensatory damages, a ruling that includes interest.
A lawyer for Gefen, Joe Pastore of Pastore & Dailey, said that he had received the promissory notes as a recruiting bonus for joining the firm. Gefen declined to comment when reached by phone. Pastore said that he was in the process of evaluating their next steps in the case.
'This was a case over wrongful termination/fraudulent inducement versus monies lent and amounts on that monies lent,' he said. 'We will address it with Morgan Stanley going forward. We'll hopefully reach a reasonable resolution.'
A Morgan Stanley spokeswoman said: 'Morgan Stanley expects departing employees to repay loan obligations to the firm and will take appropriate action to ensure that they do.'
Morgan Stanley employed Gefen from January of 2013 until March of 2016, FINRA records show.
'This is a commercial dispute. It has no reflection on Ivan as a professional. It's an issue over whether monies were due or not over a loan,' Pastore said.
You can read the full arbitration award here.