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Records of Current and Former Morgan Stanley FAs Accused of Negligent Supervision Expunged

By Garrett Keyes June 13, 2019

The records of three current and three former Morgan Stanley brokers that arose from a negligent supervision complaint have been expunged by a three-person panel at Finra’s arbitration forum.

The three current Morgan Stanley brokers are George Francis Batelli, Denise Kelly and Richard Joseph Less.

The three former Morgan Stanley brokers are Jeffrey Sean Crystal, Jennifer Salmon and Ardell Lynette Roan. Crystal is currently registered with Cadaret, Grant & Co.; Salmon is now with UBS Financial Services, while Roan is not registered, according to their BrokerCheck records.

The six individuals sought the expungement of their records relating to a customer complaint filed on December 19, 2017, which was later amended on March 15, 2019. The claimants asserted the following causes of action: negligent hiring, negligent retention, negligent supervision, breach of fiduciary duty, breach of contract, and fraud, according to the arbitration award document. The causes of action relate to various securities, it adds.

(iStock Photos)

Each of the BrokerCheck records of all six individuals has a December 22, 2017 entry of a settled customer dispute. The allegation was failure to supervise with respect to advisors’ management of accounts from 2009 through 2014. The records say the claimants asked for $2.193 million in damages, the same amount cited in the arbitration document. The dispute was settled for $1.350 million, according to the BrokerCheck records.

The arbitration panel’s award document says the expungement was awarded to the six individuals because “the claim, allegation or information” is “factually impossible or clearly erroneous” and “false.”

The panel says it based its ruling on the following reasons:

  • With respect to the negligence claims, neither Crystal nor Batelli, Kelly, Less, Roan nor Salmon had a role in the hiring or retention of Michael Connell and none of them directly or indirectly supervised Barry Connell, nor did Barry Connell report to any of them.
  • With respect to the breach of contract claims, none of the six respondents who requested expungement had any contractual relationship with the claimants.
  • With respect to the breach of fiduciary duty claims, none of the six respondents who requested expungement had a fiduciary relationship with or obligation to the claimants.
  • Salmon was not employed by Morgan Stanley until a year after the relevant period stated in the customer complaint.
  • Crystal did not manage or supervise the branch at which Barry Connell worked during the relevant period.

Michael Connell is identified as a “claimant” and a “trustee” in the arbitration document, while Barry Connell is identified as one of the respondents.

Barry Connell has a December 22, 2017 customer dispute record for misappropriation with respect to funds accounts from 2009 to 2014. Barry Connell worked at Morgan Stanley before being barred by Finra in June 2018 for failing to comply with an arbitration award or settlement agreement.

Morgan Stanley declined to comment for this article.