Navy Reservist to Repay $1.9 Mln to Morgan Stanley But Presses Dismissal Claim
A former broker and Navy reservist in Naperville, Ill., who is pursuing a discrimination claim against Morgan Stanley has agreed to repay a $1.55 million recruiting loan balance that the firm said became due when he left in 2017, according to an arbitration award finalized on Wednesday.
The agreement will not prevent Gupta from reasserting arguments he made about his alleged wrongful termination while on military leave, according to terms of the agreement cited in the arbitration award.
Gupta is pursuing a separate arbitration complaint in JAMS, a rival arbitration forum to Finra, alleging violations of the Uniformed Services Employment and Reemployment Rights Act, which protects veterans and service members against discrimination.
Aaron Maduff, a Chicago employment lawyer representing Gupta, declined to discuss the Finra decision but said his client can include the $1.5 million note balance he will pay in the damages claim he is arguing in the JAMS arbitration.
Morgan Stanley brought its Finra claim to collect the promissory note balances in August 2017, five months after Gupta voluntarily resigned while under investigation. He sued Morgan Stanley in November of that year in federal court, and the case was remanded last August by the U.S. Court of Appeals for the Seventh Circuit to JAMS for arbitration, under terms of the broker’s employment agreement.
Morgan Stanley had been investigating Gupta over “allegations regarding involvement in undisclosed outside activity involving sales of insurance policies,” according to his BrokerCheck record.
Gupta, who has not been registered as a broker since resigning, could not be reached for comment.
The single customer complaint on his record alleges a verbal complaint of losses from surrender of outside insurance policies that Gupta recommended, and was settled for $220,000 in May 2018, according to BrokerCheck. Maduff said the claim is “meritless,” and that Gupta was not involved with Morgan Stanley’s decision to settle.
Before joining Morgan Stanley, Gupta worked at J.P. Morgan Securities for four years and at Wachovia Securities for another three years, both in Naperville, according to the database.