A former Morgan Stanley advisor has been ordered by a Finra arbitrator to repay the firm more than $5 million he allegedly owed through three promissory notes.
The investment bank brought the case contending that Frederico Cardona had failed to honor the notes after he left the firm.
The arbitrator last week ruled that Cardona, who worked at Morgan Stanley from March 2021 to October 2022, must pay the bank $5,039,402, the principal balance due and owed on three promissory notes.
He also was held liable for $30,633.94 in interest accrued prior to leaving the firm; $697.50 per day in interest from that date until he pays in full; and $128,658 in attorneys’ fees. The arbitrator also ordered Cardona to reimburse Morgan Stanley the $3,000 the bank paid Finra in filing and other fees.
Morgan Stanley had accused Cardona of breach of three promissory notes, dated March 31, 2021, September 8, 2021, and December 8, 2021, that he executed with the firm when he was hired. The award is exactly what Morgan Stanley had sought in its statement of claim, filed in November 2023.
Morgan Stanley’s attorneys, Tracy L. Gerber and Elizabeth E. Moum of Greenberg Traurig, P.A., in West Palm Beach, Fla., did not respond to an inquiry for comment.
Cardona didn't appear before the arbitrator or submit a statement, according to the award document.
The document said Cardona “is bound by the arbitrator’s ruling and determination” because in January he registered for Finra’s dispute resolution portal, which provides parties access to all documents filed in the case.
Cardona, who works for Austin, Texas-based Stonecrest Partners as a senior vice president in San Juan, Puerto Rico, could not be reached for comment, and no attorney was listed in the award document.
According to BrokerCheck, Cardona began his career in 2013 with Merrill Lynch in Guaynabo, Puerto Rico. He joined Morgan Stanley in 2021 in Orlando, Fla., where he spent 18 months before moving back to Puerto Rico with Stonecrest Partners.