Dale Cebert was managing over $400 million when Morgan Stanley terminated his employment for failure to disclose his outside business activities.
Being terminated is always a serious matter any investment professional, but allegations were also added to his public online record, including:
Receiving multiple customer complaints
Operating a side business without approval
However, Mr. Cebert chose to dispute the allegations by Morgan Stanley, which is unusual in cases of this sort.
Investigation Findings Overturned
In a two-to-one ruling, FINRA arbitrators found that Morgan Stanley's investigation and subsequent findings were "grossly negligent," and communications with Mr. Cebert's clients and handling of his public record were possibly "malicious."
Mr. Cebert was awarded a multi million-dollar settlement, plus his old employer was forced to "expunge" or clean up his public record, which is quite an unusual outcome for this type of case.
Arbitration Requires Out-of-Pocket Resources
This case spotlights the possibility that the public records, intended to assist customers in selecting brokers and/or investment advisers, can do real harm to those individuals if information reported by firms is inaccurate or phrased in a way that, while possibly, technically accurate (or close), could be harmful to an individual's career and earning potential.
Complicating the issue, the process of getting the record corrected, called expungement, is conducted through a formal arbitration process, takes on the flavor of a mini-trial, and can result in extraordinary consumption of time and resources. Out-of-pocket expenditures are often prohibitive. Mr. Cebert spent over $2 million in legal fees to have Morgan Stanley's accusations corrected from his public file.
"Unfortunately, many advisers who feel they were wrongfully terminated aren't in a position to fight," Mr. Cebert said.
Disclosure of Outside Activities: Be Sure You're in Compliance With Firm Policies
Disputing termination and career-damaging reporting of a termination event (done on Form U5), which can be made public, can have costs that start in the tens of thousands of dollars with no cap on total fees involved. To complicate things, even with a strong case, there is no guarantee that the outcome would be positive or restore a professional's standing in the regulatory record.
Therefore, thorough and proper disclosure of any outside activities is most assuredly the safest route to avoid being caught up in these very difficult, costly, and damaging types of circumstances.
It's highly advisable that brokers and investment adviser representatives be aware of their firms' disclosure policies and procedures, which are usually made available in company literature, including Written Supervisory Procedures (sometimes called WSPs) or Compliance Manuals.
Disclosing any activities in a manner that is fully in compliance with firm policies is the surest way to proactively protect your position, reputation, and livelihood.
Contact Us for Assistance With Disclosure
Jacko Law Group, PC., has extensive experience assisting clients with proper disclosure of outside business activities (or with Form U5 disclosure matters shortly after a termination occurs). We're available to assist you in determining the necessary actions required to help you to remain in compliance.
Contact us today with related questions, or with any other industry-related legal concerns you might have.
Jacko Law Group provides tailored legal services and effective strategies for success, delivering exemplary solutions to complex legal and regulatory challenges to ensure that both business efforts and compliance obligations are satisfied.
Trustindex verifies that the original source of the review is Google.
Dharmi is an excellent securities lawyer who understands the law as it pertains to these cases. She is extremely proactive and represents her clients well. I highly recommend Jacko and Dharmi.
Posted on Google
Danielle Martin
Trustindex verifies that the original source of the review is Google.
I’ve had the privilege of working closely with this firm in my role as Chief Compliance Officer and I can confidently say they are an exceptional compliance partner.
Their depth of experience is immediately evidentand they bring a level of practical knowledge. What I truly enjoy is their ability to translate complex regulatory requirements into plain English, often using real, everyday examples that make implementation far more manageable.
They are also incredibly responsive and reliable. In a field where timing matters, their prompt communication and thoughtful guidance have been invaluable.
If you’re looking for a compliance attorney who combines expertise, clarity, and professionalism, I highly recommend them.
Posted on Google
Curt Rocca
Trustindex verifies that the original source of the review is Google.
Michelle and the team at Jacko Law Group have helped guide through a variety of critical circumstances as we ventured through the uncharted and unfamiliar territory of becoming and successfully operating as an RIA. I have particularly appreciated Michelle's personal involvement and genuine caring about us and our organization. She has been responsive and her counsel has been consistently on-point and helpful. She artfully guided us through our initial filing process and first SEC exam process - which went very well. Very grateful to Michelle and her team.
Posted on Google
Nicholas Di Paolo
Trustindex verifies that the original source of the review is Google.
Michelle and her team were excellent to work with, front to back. They helped me to understand the challenges ahead and were always proactive in their consultation through every step of my transition. JLG truly know the wealth management industry very well and did a great job of understanding the challenges unique to my business. Without them, I can confidently say I would not have felt as comfortable through the transition as I did. Fortunately, that's not something that stops there - Michelle and her team have kept in touch to ensure that I'm on top of certain administrative issues, trends, and simply showing me that they care about my business and success. I look forward to continuing to work with them for many years to come.
Posted on Google
Margery Neis
Trustindex verifies that the original source of the review is Google.
Dharmi Mehta was extremely helpful when my business partner and I transitioned to a new RIA firm. She and her staff were all very professional. Her guidance during our transition was invaluable. I highly recommend Dharmi and Jacko Law Group.
Posted on Google
Joseph Burwell
Trustindex verifies that the original source of the review is Google.
Dharmi and Amandeep were a delight to work with. They assisted me with a claim and stuck with me the entire way through. Dharmi's advice was invaluable, and I was most impressed by her clear and professional communication. From beginning-to-end, both Dharmi and Amandeep kept me well informed. Their entire team are proud of their work and rightfully so. Thank you!
Posted on Google
Faruk Jaffer
Trustindex verifies that the original source of the review is Google.
My mentor once told me that a good attorney is worth their weight in gold — and that couldn't be more true of Michelle and Amanda. Their expertise, professionalism, and responsiveness were top notch every step of the way. It's rare to find legal partners who are not only sharp and thorough, but also genuinely invested in your success. I’m grateful for their guidance and highly recommend them to anyone seeking trusted legal counsel.
Posted on Google
everistus etafo
Trustindex verifies that the original source of the review is Google.
It is my great Privilege to share my Review of what Atty Dharmi Mehta of Jacko Law Group did for me and by extension for my family.
From the first time complimentary conversation we had having spoken to several other Lawyers ,l knew she was the right person for the Job .Because of her background as a former RR ,she was professional,kind, Empathetic,listened and was focused on fighting for me.
From a potential of been terminated with cause ,l was able to walk away with a clean U5 with a validation that l did nothing wrong except what was in the best Interest of my clients.
I hope nobody ever has to go through what l have Experienced, but if you do ,you want Dharmi Mehta beside you .Rest assured your service Deserve 10 stars but this forum only allows 5.
Me and my family are forever grateful and will make sure that any RR who needs an advocate will know about you .
Everistus Etafo
Posted on Google
Karen Althaus
Trustindex verifies that the original source of the review is Google.
I have worked with Jacko Law Group for 2 different business situations that necessitated an attorney. In both cases, the team was very thorough & competent. Their attention to our situation and the extra effort they put into our case(s) was very much appreciated. I would highly recommend Jacko Law Group!
