Former Morgan Stanley Broker Armstrong Seeks to Vacate Arbitration Award

AM Editorial Team

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Christopher R. Armstrong, a former broker at Morgan Stanley, has filed a complaint in federal court seeking to vacate part of a $13 million arbitration award that ordered him and his one-time partner, Randall B. Kiefner, to pay $2.88 million combined. The arbitration award was issued in November of 2023, and Armstrong is arguing that the decision to hold him jointly liable for damages “manifestly disregarded” state law. Armstrong and Kiefner had been hired by Morgan Stanley in 2019 from Charles Schwab Corp, and Schwab initiated the legal battle by filing arbitration claims against Morgan Stanley, alleging it had engaged in “predatory” recruiting tactics.

The legal battle between Schwab, Morgan Stanley, and the two brokers has been ongoing since 2019. Following their move to Morgan Stanley, Schwab filed arbitration claims against the wirehouse, alleging that it had engaged in “predatory” recruiting tactics. Schwab also included claims against Armstrong and Kiefner, alleging that they had violated their employment contracts and taken client contact information. Morgan Stanley fired Armstrong and Kiefner, alleging that they had failed “to meet the Firm’s expectations regarding professional conduct and adherence to the Firm’s policy governing the transition of Financial Advisors to Morgan Stanley.” Armstrong and Kiefner claimed that the termination was defamatory.

In February of 2023, a panel of arbitrators held Morgan Stanley and the two brokers jointly liable for $4.3 million in damages to Schwab and ordered the wirehouse to pay $3.03 million in punitive damages to Schwab and $4.7 million in damages and attorney fees to Kiefner and Armstrong based on their counterclaims alleging defamation. That same panel had also partially vindicated Kiefner and Armstrong, who had managed a $750 million book at Schwab, by calling for Morgan Stanley to expunge “defamatory” U5 filings from their records.

Armstrong’s complaint adds another chapter to the long-running litigation saga tied to Morgan Stanley’s botched hiring of the duo in 2019 from Charles Schwab Corp. Armstrong is arguing that the arbitration panel’s decision in November confirming that he was jointly liable for damages “manifestly disregarded” state law. Florida and New Jersey, where Armstrong and his ex-partner worked, prevent a party found guilty of wrongdoing from seeking to have others found jointly liable contribute to damages, according to Armstrong’s complaint.

Morgan Stanley, Armstrong, and his former partner were ordered in March of 2023 to pay a combined $4.32 million to Schwab. Morgan Stanley fronted the full amount to Schwab, but the duo shirked their obligation to pay their share, the wirehouse said. It obtained both a court and the November arbitration award holding the brokers liable for their two-thirds.

Armstrong’s partner, Randall B. Kiefner, is incarcerated at the Central Florida Reception Center in Orlando on child pornography charges. He is scheduled for release in 2030, according to the Florida Department of Corrections.