Top BrokerDealer Swings For Celebs & Sports Stars’ Wallets: Morgan Stanley Push

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BrokerDealer.com blog update courtesy of extract from Investment News

tysonmikeboxingapmi-resize-600x3386-Pack Broker-Dealer Morgan Stanley, whose brokerage helps manage more than $2 trillion of client assets, started a new unit that focuses on professional athletes and entertainers. This new initiative could prove to be prime meat for Morgan’s investment bankers and high-net worth advisors, when considering the many instances in which celebs and sports stars have faltered in their investment strategies.

The division has 69 advisers and will add a few more within the next year, Drew Hawkins, head of the Global Sports & Entertainment group, said Thursday. Many of them already had been working with celebrities, and brokers took a three-day training program on how to cater to those clients, he said.

Other brokerdealers have carved out a niche in their local markets to serve celebs and athletes; a full listing of those BDs is available via brokerdealer.com

Athlete pay has surged in recent years, with Giancarlo Stanton, a Miami Marlins outfielder, poised to sign a $325 million contract over 13 years, a Major League Baseball record, according to CBSSports.com. Kevin Durant, the National Basketball League’s reigning most-valuable player, re-signed as a Nike Inc. endorser with a contract worth $300 million over 10 years, Bloomberg News reported in September.

“The size of these contracts and the amount these individuals are earning tends to increase on a daily basis,” Hawkins said. “Celebrities and entertainers and those connected with those industries in a lot of cases make a lot of money, but they also have a lot of unique circumstances.”

Morgan Stanley will provide customized loans to the individuals and their outside businesses, offer insurance against injuries or voice damage and give advice on philanthropic endeavors, Hawkins said. He declined to identify any of the firm’s celebrity clients.

Jobs Available: Wall Street Scrambles to Hire Next Gen BrokerDealers

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BrokerDealer.com blog post courtesy of extract from July 5 story from The New York Times

nytimes logoA battle is raging on Wall Street as never before, with powerful factions scrambling for control of a precious resource.

On one side are the giant investment banks and broker-dealers, with names like Morgan Stanley and Goldman Sachs. Lined up against them, but also warring among themselves, are the giants of private equity — Kohlberg Kravis Roberts, Apollo Global Management and the Blackstone Group, to name just three. And the private-equity firms just happen to be the banks’ clients.

The prize they are fighting for is young talent.

This summer, dozens of junior bankers in their early to mid-20s will start jobs in private equity after spending their first two years out of college working at investment banks. Private-equity firms use billions of dollars of cash and plenty of debt to buy entire companies. They are seen by many young strivers as the next rung on an elite career ladder, promising higher status and more pay — around $300,000 a year, including salary and bonus, roughly double what a second-year banker might earn at Goldman.

But for junior bankers, who are known as analysts, securing such a job means stepping into the middle of a Wall Street struggle that has intensified since the financial crisis.

For the full story, please click here.

Two brokers who claim Morgan Stanley misled them win back $5M arb award

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BrokerDealer.com/blog update courtesy of extracts from InvestmentNews.com

An appeals court has upheld an arbitration award of nearly $5 million for two brokers who claimed Morgan Stanley misled them during the firm’s recruiting process.

A panel of appellate court judges in California unanimously overturned an earlier ruling in the Superior Court of San Diego County that had vacated the award. In the third decision rendered in the case, the Court of Appeal reinstated the award, denying Morgan Stanley’s claims that a potentially biased arbitrator had interfered with the case.

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“Although we conclude the arbitrator failed to make certain disclosures, these undisclosed facts could not cause an objective observer to doubt the arbitrator’s impartiality,” wrote Judge Richard Huffman, in the opinion.

A spokeswoman for Morgan Stanley, Christine Jockle, said the firm disagrees and is still considering how to proceed after the ruling, which was issued Monday.

A lower court had originally vacated the award after Morgan Stanley argued that the industry arbitrator on the panel, who was a broker at a regional firm, failed to disclose his in-laws’ ties to Morgan Stanley and the fact that his daughter allegedly had a brokerage account with Morgan Stanley.

But the appeals court disregarded the notion that any account she had at Morgan Stanley would have had an impact either way on her father’s decision in the matter.

Mr. Huffman also denied the claims that the same arbitrator was biased against Morgan Stanley because the wirehouse recruited a son-in-law who worked at the same firm as the arbitrator. It tried to recruit a second son-in-law but was unsuccessful. Mr. Huffman wrote that Morgan Stanley was aware of those instances before the arbitration began.

“Morgan Stanley was aware of all the allegedly undisclosed facts prior to the subject arbitration,” he wrote. “These undisclosed facts could not cause an objective observer to doubt the arbitrator’s impartiality.”

Mr. Huffman called the firm’s argument “counterintuitive and speculative,” and noted that Morgan Stanley had asked the same allegedly biased arbitrator to sit on a panel in three other arbitration cases in which the firm was a party. Morgan Stanley, which won a substantial portion of at least one of those awards, did not contest the decisions in the other matters.

Read full story here