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Court Compels Morgan Stanley Advisors to Arbitrate for Their Deferred Compensation at FINRA

Today, the Southern District of New York granted Morgan Stanley’s motion to compel arbitration in the class action Shafer, et. al. v. Morgan Stanley, et. al. (Case 1:20-cv-11047-PGG).

Plaintiffs, former Morgan Stanley financial advisors, sued Morgan Stanley asserting that Morgan Stanley violated the Employee Retirement Income Security Act of 1974 (“ERISA”) by not paying Plaintiffs all of their deferred compensation when they resigned from Morgan Stanley, and Morgan Stanley moved to compel arbitration on June 29, 2022.  The Court’s decision forces Plaintiffs and any similarly situated former Morgan Stanley financial advisor to file their claims for unpaid deferred compensation in FINRA Arbitration.

In its opinion, the Court held that Morgan Stanley’s Compensation Incentive Plan and Equity Incentive Plan are ERISA plans and “‘individual account plans,’” which under ERISA “means a pension plan which provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant’s account….” (Order, p. 44).  The Court’s holding may significantly strengthen FINRA arbitration claims against Morgan Stanley, which primarily depend on the applicability, and Morgan Stanley’s violation, of ERISA.

Lax & Neville LLP has extensive experience successfully pursuing deferred compensation claims in FINRA arbitration, including claims under ERISA.   Over the past several years, for example, this firm has won more than $35 million in unpaid deferred compensation, interest, and costs and attorneys’ fees for more than two dozen former Credit Suisse investment advisers.

If you are a former Morgan Stanley financial advisor who had deferred compensation when you left Morgan Stanley, please contact us at 212-696-1999 or email Barry Lax at or Brian Neville at to discuss your potential claims.

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