Morgan Stanley lawyers have implored a federal judge not to “cause confusion” for some 2,800 current and former employees whom the wirehouse allegedly shortchanged on business-expense reimbursements.

The current and former employees would be confused if the judge included objections to a proposed $10 million class action settlement arising from those unreimbursed expense claims in a notice of the tentative deal, the Morgan Stanley lawyers argue in a brief filed in late June.

A Morgan Stanley spokesperson declined to comment.

The wirehouse’s lawyers made their argument when opposing a request filed by two former Morgan Stanley financial advisors, asking the same judge to include in the settlement notice their objections to the proposed deal.

The two objecting FAs — Tracy Chen and Matthew Lucadano — made their request in part because “We believe there’s a good chance that the Court will preliminarily approve the settlement, which would lead to a notice being sent to the class members to explain the settlement and let them voice their opinion on whether it is a good deal,” according to their lawyer Jahan Sagafi at San Francisco’s Outten & Golden.

Chen and Lucadano initiated their own pending separate proposed class action against Morgan Stanley five years ago, also based on allegations about being shortchanged on expense reimbursements.

Indeed, it was only after Chen and Lucadano filed their claims that Brandon Harvey, also a former Morgan Stanley FA, filed his own proposed class action — the lawsuit the wirehouse has now tentatively agreed to settle.

And it was only days before Chen and Lucadano had expected to air their claims at a January trial that Morgan Stanley struck the deal to settle the Harvey case.

Under the proposed deal with the Harvey plaintiffs, Morgan Stanley would pay Harvey — who worked for Morgan Stanley for four years until 2018 when he left for LPL Financial — and other eligible former and existing Morgan Stanley employees about $3,600 each.

Morgan Stanley’s proposed deal with the Harvey plaintiffs requires court approval, which would be issued only after prospective class members are given notice and then the court evaluates any objections they raise.

But if the court finalizes the Harvey-Morgan Stanley settlement, the ruling would eliminate the wirehouse’s liability regarding un-reimbursed expense claims and bar Chen and Lucadano from continuing to pursue their separate but related claims. This is because both cases are filed in California federal court but under a California state law — the Private Attorney General Act (PAGA). The law lets plaintiffs pursue what amounts to a class action without having to get a court to certify their proposed class. But a settlement in one PAGA-based lawsuit erases all other related PAGA claims against the same defendant.

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“If the objections and the existence of the Chen case are not described in the notice, then the notice class members will not have adequate information to assess the strengths of the case and the reasonableness of the settlement,” Sagafi says.

In a brief filed earlier this year, previously reported on by FA-IQ, Chen and Lucadano alleged the tentative $10 million settlement between Harvey plaintiffs and Morgan Stanley allows the wirehouse to pay employees at least $300 million less than what it owes them for unreimbursed business expenses.

Chen worked for Morgan Stanley from 2010 to 2013 when she moved to Oppenheimer. But she resigned from that firm and was barred from the industry after allegations arose about her “conversion of firm funds, falsification of firm records, and causing Morgan Stanley’s books and records to be inaccurate," according to BrokerCheck.

Lucadano has no disciplinary actions on his record and worked for Morgan Stanley for five years until 2014, when he left for LPL Financial.