Fired by Wirehouse for Unapproved Outside Business, Texas Broker Relocates to Stifel
A Morgan Stanley veteran who was ousted over alleged unapproved outside business activities has been hired by Stifel, Nicolaus & Co., according to registration records.
Mitchell, who had worked at Morgan Stanley and its Smith Barney predecessor for almost one-third of his 34-year brokerage career, declined to comment. A spokesman for St. Louis-based Stifel confirmed the broker’s arrival but declined to comment on its evaluation of Morgan Stanley’s U5 filing. A source close to his practice said Mitchell had regularly generated around $2 million in annual revenue.
The wirehouse fired him for “allegations related to the representative’s involvement with an outside business,” according to his BrokerCheck record. It did not specify the outside activity.
The Financial Industry Regulatory Authority’s crackdown on unsupervised activities has led to the preemptive firing of a growing number of brokers, some of whom were selling dubious investments but many others who failed to get permission for innocuous investments, such as owning as little as a single real estate property, according to defense lawyers. They, not to mention headhunters, applaud the willingness of firms to make opportunistic hires when circumstances permit.
Mitchell is at least the fourth Morgan Stanley broker since September who has landed at another firm after being fired for what some outsiders consider minor or unintentional violations.
Raymond James Financial in September hired a Chicago broker who had been managing $1.7 billion at Morgan Stanley and was discharged after a friend posted a controversial photo of the advisor on Facebook. The wirehouse cited “management discretion to end employment relationship following a third-party’s social media posting involving the employee.”
RayJay two weeks ago also hired a $4 million-plus Morgan Stanley producer in Boca Raton, FL, who sources said was fired for aggressive work-from-home client solicitation behavior. And Ameriprise Financial in January welcomed a Dallas broker managing around $150 million at Morgan Stanley who was allegedly dismissed for miscoding accounts on which he was sharing credits with a retired advisor.
A spokeswoman for Morgan Stanley declined to comment.
Morgan Stanley’s U5 regulatory termination filing on Mitchell did not detail the outside business that got him into trouble. Mitchell in July paid $78,000 to settle a complaint from a customer who alleged the advisor solicited him over four-and-a-half years to invest in “outside…opportunities.”
The two other advisors on Mitchell’s team, Rick Barton and Allison Lopes, remain at Morgan Stanley, according to their BrokerCheck records.
Finra requires approvals of outside business participation to ensure that firms can monitor advisors for possible conflicts, and has highlighted “outside business activity” as a top exam priority in 2021.
Mitchell first registered as a securities representative in 1986 at Cleveland, OH-based McDonald & Co., and worked for 17 years at Wachovia Securities and predecessor firm Prudential Securities before joining Smith Barney in early 2009.