February 21, 2024



a complicated case Morgan Stanley’s hiring effort went awry The story took an ugly turn when a former agent was arrested on unrelated child pornography charges.

Randall B. Kiefner, a former broker and investment advisor previously hired by Morgan Stanley and Charles Schwab, will be in Seminole County, Fla., next month Appeared in court to face 21 charges of possessing child pornography.

Kiffner and fellow agent Christopher Armstrong were at the center of a hiring dispute that led to A $7.3 million verdict was issued against Morgan Stanley in late February. The FINRA arbitration panel approved the ruling against Schwab after reviewing Kiffner and Armstrong’s decision to leave Schwab for Morgan Stanley in March 2019, where they wasted little time with their former employers. Customers reconnect.

These actions put them in violation of the Schwab contract clause, which prohibits them from soliciting business from former clients within 18 months of leaving a new employer and carrying certain types of client information (phone numbers, records of financial services used). They and Morgan Stanley were ordered by FINRA’s arbitration panel to pay Schwab $3.03 million in compensatory damages and $1.2 million in attorneys’ fees and costs. Morgan Stanley was also ordered to pay its own $3.03 million in punitive damages.

Separately, Morgan Stanley was ordered to pay Kiffner and Armstrong $1.17 million and $2.85 million in compensatory damages for defamation and breach of contract claims resulting from Morgan Stanley’s decision to fire them about a month after hiring them . The pair will also be awarded nearly $675,000 in attorneys’ fees and costs.

Kiffner was arrested at his Apopka, Fla., home on April 5 for pending transactions of the money and was later charged with 21 counts of possessing child pornography.

According to a report from the Seminole County Sheriff’s Office, Kiffner was approached by officers while walking his dog earlier in the day and asked if they could enter his house and view the contents of his iPhone. He reportedly agreed, and officials found numerous files containing child pornography.

Kiefner pleaded not guilty to the charges on April 6. His bond was set at $735,000 and he is scheduled to appear in court on May 8. Defense attorney for Kiefner, Carlos E. Payas of Orlando, Fla., did not immediately respond to a request for comment. AdvisorHub first reported Kiffner’s arrest.

The child pornography allegations are just the latest in Kiffner’s long line of legal troubles. In a March 24 petition asking a federal judge in New Jersey to confirm the FINRA arbitration award, Morgan Stanley said Kiefner and Armstrong have yet to pay some of the $4.3 million they owe Schwab for their alleged hiring blunders. Morgan Stanley said it had filed a new arbitration request with FINRA, the broker-dealer industry’s self-regulator, seeking to have the couple pay their portion of the original award, $2.8 million .

While it waits for the dispute to be resolved, Morgan Stanley has offered to pay the full $4.3 million owed to Charles Schwab. The court instead ordered Morgan Stanley to deposit $2.8 million in escrow pending a decision by the FINRA arbitration panel.

Morgan Stanley noted in its petition that it was prepared to pay Kiefner and Armstrong the money the FINRA arbitration panel determined owed them for the manner in which they were fired.

“While Morgan Stanley disagrees with the arbitration panel’s decision, we will fully comply,” a Morgan Stanley spokesman said in an email. “By contrast, Armstrong and Kiffner refused to pay their fair share despite the panel’s clear determination that they were jointly and severally liable. This move was designed to ensure that they were paid in accordance with the panel’s determination of them.”

Armstrong and Kiefner are suing the law firm of Shumaker, Loop and Kendrick and one of their attorneys, Michael Taaffe, respectively. The team was hired by Morgan Stanley shortly before they were hired to advise them on what they could and could not legally do when they left Schwab. Shumaker, Loop and Kendrick, and Taaffe failed to disclose their history of working with Morgan Stanley on previous cases, according to the lawsuit.

Taafe did not immediately respond to a request for comment. Neither did Armstrong and Kiffner’s lawyer in that case, Jim Ecclestone of Ecclestone LLP in Chicago.

According to BrokerCheck, Kiefner has 25 years of experience in the industry and does not disclose. From 2008 to 2019, he worked at Schwab’s office in Orlando.