Madison - St. Clair Record

Friday, February 28, 2020

Former Morgan Stanley branch manager sues for breach of contract

By Steve Gonzalez | Jun 27, 2008

A former branch manager and financial adviser with Morgan Stanley filed a three-count suit against his former employer in Madison County Circuit Court June 23, alleging breach of contract, defamation and tortuous interference with a business expectancy.

Andrew Millas claims he entered into an employment contract with Morgan Stanley in August 1999, and it continued for a period of six years. He claims after his contract expired he continued to work at Morgan Stanley until he was terminated on Jan. 29.

According to Millas, he was recruited by Morgan Stanley for the position of branch manager and held that position until December 2006, when he was asked to step down by Kevin Whitehead. After he stepped down he assumed the title of Vice-President and financial adviser.

He claims in August 2007, he received a letter from an agent of Morgan Stanley that stated he was on "heightened security" for three months based upon two alleged instances of unauthorized trading on client accounts for which he was the manager.

"Plaintiff was never given any facts to substantiate the allegations of unauthorized trading," the complaint states.

According to Millas, on Jan. 25, he received a phone call from Joann Soloy, Kevin Whitehead and a corporate attorney from Chicago regarding unauthorized trading and once again was not provided with any information regarding the specific trades that were allegedly unauthorized.

He claims four days later on Jan. 29, he prepared and submitted a letter of resignation with Morgan Stanley's human resources office which stamped the letter as received, but despite his resignation, he was terminated later the same day.

Millas claims that Morgan Stanley filed documents with regulatory agencies reflecting his termination which resulted in a significant delay in his ability to register with those agencies for future employment.

"At the time of Plaintiff's termination, he generated approximately Seven Hundred Thirty-Six Thousand dollars ($736,000.00) in gross annual commissions, for which he was entitled for Forty-Two Percent (42%)," the complaint states.

Breach of Contract

Millas claims that pursuant to agreement and past practices he was to share in the fees and commissions generated from investment business he procured for Defendant.

He also alleges he was to share in commissions and fees with regard to shared investment accounts with managers and other Morgan Stanley employees including branch manager Lon Dircks.

Millas claims Morgan Stanley failed to properly apportion the shared accounts between her and Dircks by assigning the majority of the accounts to Dircks.

"Plaintiff procured significant investment business for Defendant, as evidenced by his gross annual commissions of approximately Seven Hundred Thirty-Six Thousand dollars ($736,000.00)," the complaint states.

He claims Morgan Stanley and its agents and designees received the benefit of the investment business he procured during the term of the agreement.

Millas claims Morgan Stanley breached the agreements it entered into with him and has failed to fully compensate him in accordance with those agreements to share fees and commissions from investment business he procured for Morgan Stanley.


Millas claims on Feb. 11, Morgan Stanley filed a document with the Financial Industry Regulatory Authority (FINRA) known as the "Uniform Termination Notice for Securities Industry Registration" or U5.

According to Millas, Morgan Stanley claims that the basis for his discharge was due to him exercising discretion in customer accounts without prior authorization.

Millas alleges Morgan Stanley wrongfully made allegations that accused him of violating investment-related statutes, regulations, rules or industry standards of conduct and answered in the affirmative when asked if he was discharged from the firm for the alleged violations.

The U5 document is part of a broker's employment history and registration and is accessible by future prospective employers and governing bodies, Millas claims.

"Completion and submission of the U5 document is clearly publication," the complaint states.

Millas claims the statements made by Morgan Stanley were "false and made with willful and wanton intent with reckless disregard of their truth or falsity" for the purpose of harming his name and reputation.

He claims the statements made in the U5 imputed his inability to adequately perform the duties of Vice-President and financial advisor, as well as a lack of integrity in the performance of those duties which makes the statements defamatory per se.

"Defendant has a duty not to publish false statements concerning Plaintiff," the complaint states.

Millas claims the statements in the U5 caused him to be injured in his business and personal reputation resulting in a loss of business and income.

He also alleges he was denied a position previously offered by Stifel Nicolaus and was unable to obtain any other employment as a broker until he was able to once again be registered with the regulatory agencies.

Millas claims he has suffered loss of employment, loss of salary and benefits and his reputation and future earning potential has been damaged.

Tortuous Interference with a Business Expectancy

Millas claims that at the time of his termination, he was in the process of negotiating another position and that negotiations had advanced to the point where he was provided "transition documents" in February.

He claims the documents specified his future position, compensation, benefits and other terms of employment.

According to Millas, once Morgan Stanley became aware of the negotiations intentionally and without justification interfered with this business expectancy by making false accusations regarding his trading activities.

According to Millas, the pending offer of employment was rescinded.

"Not only did Plaintiff lose the opportunity to accept employment with Stifel Nicolaus, he also lost the opportunity to accept any employment as a broker until such a time he could once again be registered with the regulatory agencies due to the termination information contained on his U5," the complaint states.

He claims Morgan Stanley engaged in a course of conduct knowing he would suffer substantial financial losses with reckless indifference to the actual and potential adverse consequences to him.

Represented by Mark Goldenberg and Holly Reese of Edwardsville, Millas is seeking a judgment against Morgan Stanley in excess of $150,000 in order to fairly and adequately compensate him for his damages.

He also is seeking an additional sum in punitive damages as a result of Morgan Stanley's willful and wanton conduct which showed a "complete indifference to or conscious disregard" for his welfare in a sum that will be severe enough to punish Morgan Stanley and deter future conduct.

The case has been assigned to Circuit Judge Nicholas Byron.

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Organizations in this Story

Stifel NicolausMorgan Stanley