Massachusetts regulators on Wednesday, September 12, charged Morgan
Stanley and three employees with illegally cold-calling individual who placed
résumés on CareerBuilder.com.
The state’s complaint says a broker in Morgan’s High Street Boston office,
Arlen Fox, made it a “regular practice” of downloading “thousands” of résumés
from CareerBuilder.
The complaint says Fox’s activity, which occurred from August 2005 to
December 2006, was a violation of Morgan Stanley’s contract with
CareerBuilder.
And by failing to check the names against do-not-call lists, Fox and the firm
violated state and federal do-not-call lists, the state alleged.
Bryan Lantagne, director of the state’s securities division in Boston, says
the case was sparked by an investor who was “irate” about getting a call from
Morgan Stanley based on information the person had supplied to
CareerBuilder.
At least one manager at the firm, assistant branch manager David Swartz, was
aware of Fox’s activities, the state alleged.
Swartz and branch sales manager Michael Rhodes were also charged.
In an e-mailed statement, James Wiggins, a Morgan Stanley spokesman, said the
case was an “isolated instance in one office involving a single financial
adviser.”
Massachusetts is seeking a cease-and-desist order and an undetermined fine
and a censure against Morgan Stanley.
The complaint also alleged that an unnamed Morgan employee in the Boston
branch made “untruthful and/or inconsistent statements” regarding the firm’s
system for retaining telephone records.
The firm is “reviewing how we’ll respond,” Wiggins says.
Filed by Dan Jamieson of Investment News, a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.