Morgan Stanley Wealth Management has confirmed a legal settlement with Clifford Jagodzinski, a former risk officer, who claimed to have been fired for reporting that a broker at the firm was "flipping" securities.
A Morgan Stanley spokesperson told Family Wealth Report: "We settled the matter without any admission of liability to avoid the cost and distraction of protracted litigation. To be clear, the settlement should not be interpreted as a validation of any of the allegations that were made."
In August Bloomberg reported that Jagodzinski alleged - in a complaint filed in federal court in New York - that he was terminated in April after reporting the brokerís "questionable trading". Jagodzinski claimed that such trading was "obviously designed to bilk investors" by driving up commissions.
Jagodzinski reportedly said his superiors initially praised him for reporting the trades and pointing out activities which he thought were improper, but later told him to stop his investigations. He was then fired in a matter of days after saying he thought the trades should be disclosed to the Financial Industry Regulatory Authority, the news service said, citing the complaint.
Jagodzinski reportedly sought reinstatement and "at least" $1 million in damages.
Morgan Stanley declined to comment on the details of the settlement.