Reuters reports that overselling a job opportunity to a coveted recruit might be commonplace, especially in the money-talks brokerage world. But firms can pay a price if managers fail to follow through on promises they make when wooing a new hire.
An arbitration panel ruled that Morgan Stanley Smith Barney must pay $5m to two brokers for making false promises when recruiting them from rival brokerage UBS.
The award, dated Tuesday, is the latest decision in a spate of cases involving unmet promises that advisers claim were made to win them over, only to turn a blind eye to those agreements when they started work.
'Rarely do you have a case where everything that the claimant says is completely corroborated by Morgan Stanley's own...documents', said California-based lawyer Erwin Shustak, who represented the brokers.
Morgan Stanley Smith Barney said in a statement on Wednesday, 'We believe this decision is wrong and not supported by the facts'.
Asked if it would appeal the ruling, Morgan Stanley said it was reviewing its options.
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