Three former
“The advisory opinion creates immediate and concrete harm to financial advisors who are arbitrating their deferred compensation claims against Morgan Stanley, including plaintiffs,” the three say in their complaint in the US District Court for the Southern District of New York.
The ex-advisers say the Sept. 9 advisory opinion—which concluded Morgan Stanley’s deferred incentive compensation program isn’t an employee benefit pension plan under the Employment Retirement Income Security Act—contradicts the district court’s ruling where it held the opposite. The US Department of Labor didn’t immediately respond to a request for comment.
Labor Secretary Lori Chavez-DeRemer, Assistant Labor Secretary Daniel Aronowitz, and Principal Deputy Assistant Labor Secretary
The three plaintiffs argue the advisory opinion relied on an incorrect interpretation of ERISA, failed to consider relevant court precedents, and violated the Labor Department’s own procedures for issuing such opinions. The opinion causes concrete harm to them by undermining their pending arbitration claims against Morgan Stanley over the cancellation of their deferred compensation, the complaint says.
Two of the three suing former advisers, Steve Sheresky and Jeffrey Samsen, are among a dozen other ex-workers who previously sued Morgan Stanley, alleging they forfeited money under the vesting rules of deferred compensation programs. Morgan Stanley was granted a motion to compel arbitration, but the district court also held the plan was subject to ERISA.
The plaintiffs in the instant case say Morgan Stanley is using the advisory opinion as a “sword” in its Financial Industry Regulatory Authority arbitrations. They allege Morgan Stanley told parties in a recent pre-hearing brief that the Labor Department rejected the ex-advisers’ position and said the advisory opinion is the official position of the Labor Department.
Contrary to the Labor Department’s own policy, “the advisory opinion is not exclusively guiding Morgan Stanley’s future behavior,” the plaintiffs say. “Instead, the DOL determined, retrospectively,” that past plans aren’t governed by ERISA.
The former advisers seek to have the advisory opinion vacated and set aside as arbitrary, capricious, and contrary to law under the Administrative Procedure Act. They similarly asked the district court to invalidate the “bonus regulation” section of the Code of Federal Regulations they allege conflicts with ERISA’s statutory language. They also seek declaratory relief, costs, fees, and other relief deemed proper by the court.
Motley Rice LLC represents the former advisers.
The case is Sheresky v. United States, S.D.N.Y., No. 1:25-cv-08935, 10/28/25.
Source: news.bloomberglaw.com
