Panel Decides Against Morgan Stanley, Broker

An arbitration panel Wednesday awarded a former California man almost $1.8 million in a case against brokerage Morgan Stanley and a broker in its Beverly Hills office.

The man, William Hall, claimed that he and his wife, a former America Online employee, had placed more than $10 million in AOL stock in two accounts at the firm in 1999 and asked the firm to provide conservative investment advice.

The broker, Joseph Schlater, placed the Halls in a series of complex financial instruments, said their attorney, Cary Lapidus of San Francisco. In exchange for limiting their potential gains if AOL’s stock rose, the instruments were designed to “hedge,” or limit, their losses if the shares fell.

But the hedging technique was poorly conceived and overly expensive, said Lapidus, who estimated his client’s losses at $3.7 million. The complaint had sought a total of $5.7 million in compensatory damages.

The Halls, formerly of San Francisco, now live in Nevada.

Morgan Stanley and the broker declined to comment, a spokesman for the firm said.