Morgan Stanley On FINRA Arbitration Claim Over Facebook IPO: Not Our Client

By David Cohen 

Investor Uma Swaminathan of East Brunswick, N.J., filed a claim with the arbitration unit of the Financial Industry Regulatory Authority in July, regarding Morgan Stanley’s role in Facebook’s botched initial public offering. However, there’s one problem: Morgan Stanley said Swaminathan was not one of its customers.

Reuters reported that Morgan Stanley filed a complaint with the U.S. District Court for the Southern District of New York, claiming that Swaminathan ordered Facebook shares through Vanguard Financial Group, and seeking to halt the FINRA arbitration.

Swaminathan filed a claim with FINRA alleging $1.9 million in damages, and Vanguard, Facebook, Nasdaq OMX Group, and the Nasdaq exchange were also named, according to Reuters.

Morgan Stanley said in its filing that Swaminathan does not have a retail brokerage account with the firm and “has not engaged in any securities or business dealings with the firm,” Reuters reported.

None of the other underwriters of the Facebook IPO was named in Swaminathan’s claim.

Readers: Do you think Morgan Stanley will be successful in having the FINRA arbitration process halted?