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Morgan Stanley Arbitration Lawyers Late in Promissory Note Claim

Tuesday, March, 27, 2012

In a recent arbitration, a FINRA arbitration panel denied Morgan Stanley's claim over a promissory note with former employee Joseph D. Jackson. They sought, but did not receive, a total of $221,588 in damages, plus interests, fees and costs. Simply put, the arbitration attorneys waited until the statute of limitations ran out on the note before they made their claim.

This Contract Arbitration Was Dead on Arrival


The Respondent did not have to work very hard to defend his stance. He only had to reference the North Carolina statute of limitations on promissory notes and FINRA's own Rule 13206. Both of these statutes only allow 6 years for the lender to seek arbitration.


Morgan Stanley's claim was presumably made just a few days late. While it is unclear when exactly they filed their claim for arbitration, the FINRA representative denied their claim as it was made after September 5, 2011. The decision was “cut and dry.”

Unanswered Questions in This Financial Arbitration


There is much about this case that does not quite add up. First of all, why would one of the largest financial institutions in the US drag their feet on making a Statement of Claim? Why didn't the FINRA representative award sanctions to the Respondent due to this late action? Why did the Respondent not ask for an award of this type?


It definitely seems that this claim by Merrill Lynch's arbitration attorney team was quite frivolous and in bad faith. Merrill Lynch has already been subject to a regulatory fine for abusive collection efforts with its promissory notes. While this claim may not be “abusive” in the conventional sense, it certainly stands as a case in point where frivolous claims against an individual by a company cannot hold water in arbitration.