A top-ranked broker who managed almost $1 billion in client assets at Morgan Stanley in Tampa, Florida, will have an unblemished record to show for her 36 years in the industry thanks to an arbitration award finalized this week.
A three-person panel showed sympathy in granting Marileigh Fay Hensley, who spent all her career at Morgan Stanley and predecessor firms, expungement of a single customer claim that cropped up shortly before her retirement in January.
“It would be an injustice to Unnamed Party Hensley to have a successful career marred by false allegations ever, but even more so just before she retired,” the panel wrote, noting that the mark has “adversely affected her business and professional reputation.”
The disclosure was tied to a complaint in March 2021 from a couple who had sought $100,000 in damages over an allegedly unsuitable investment in a proprietary Morgan Stanley mutual fund wrap program called TRAK. Morgan Stanley settled the dispute for $15,000, according to a summary on Hensley’s BrokerCheck.
The panel cited Hensley’s notes from multiple client meetings that reflected her suggestions over a period of several years that the customers diversify or reallocate their TRAK holdings. The investment became an issue during the pandemic-induced market downturn in March 2020 when the couple sought to transfer non-TRAK holdings to another firm and triggered a margin call.
“We find no evidence to support any of Claimants’ claims in the statement of claim and certainly not as to suitability, breach of fiduciary duty, improper disclosure of management or advisory fees, violations of FINRA Rules or state and federal securities laws,” the panel wrote.
The clients did not participate in the expungement hearing. Their lawyer, Kyle M. Kulzer of Alan L. Frank Law Associates in Jenkintown, Pennsylvania, did not return a request for comment.
Morgan Stanley began phasing out the TRAK wrap fee program to new investors in 2014 and closed off the remainder in August 2020, according to its regulatory filings. Hensley had inherited the customers, and their TRAK investments, from a partner who retired in 2015, the panel said. There were no financial losses on the customer accounts, the panel noted.
A Morgan Stanley spokesperson did not return a request for comment, and Hensley could not be reached for comment on the award.
The retired broker started her career in 1986 at a Morgan Stanley Smith Barney predecessor, according to BrokerCheck. She had managed $991 million in client assets, according to Forbes, which ranked her as a top woman broker in 2021 and #40 in the state of Florida.
Hensley had co-founded the Bay Emerald Group at Morgan Stanley and also worked as branch manager in Clearwater, Florida between 2006 and August 2020, according to her LinkedIn profile.
