MIAMI – A former Morgan Stanley financial adviser who filed a $3.5 wrongful termination claim in 2014 lost that case – and must pay roughly $500,000 to Morgan Stanley.

On April 25, Judge Robert Scola Jr. of the U.S. District Court for the Southern District of Florida confirmed an arbitration award in favor of Morgan Stanley, Smith Barney and related plaintiffs against defendant Charles Peter Wallace, who had originally sued Morgan Stanley for $3.5 million in damages. 

Claims by both parties went to consolidated arbitration with the Financial Industry Regulatory Authority arbitration panel.

Court documents show Wallace initiated arbitration proceedings in 2014 alleging wrongful termination, defamation, breach of fiduciary duty, negligence, and breach of contract against Morgan Stanley.

Wallace's complaint is that the panel exceeded its authority and looked at the issue too broadly.

Wallace also alleged that the panel allowed inadmissible evidence and overruled objections improperly – allegations the court dismissed.

“Although Wallace has reproduced, within his consolidated response and motion to vacate, over 10 pages of testimony and argument from various parts of the arbitration hearing, he has not shown that the panel concluded that he in fact proved his case on any of his claims,” the court wrote. “Nor has Wallace shown that the panel could not have found in Morgan Stanley’s favor on some other basis.”

The court also pointed out that in relation to various charges and allegations of difficulty in the arbitration process, the panel was not bound to follow federal rules on evidence handling, and that arbitrators have “wide latitude." 

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