A Decemebr 10, 2006 article by Gretchen Morgensen of The New York Times tells the story of an arbitartion award against Morgan Stanley.

The case brought on behalf of Mabel Strobel, an 86-year old former client who sued the firm for  more than $275,000 in investment losses.  Morgan Stanley’s broker placed almost all of Strobels’ entire life savings (over $1 million) in technology mutual funds operated by Morgan Stanley. Not surprisngly, these funds generate some of the heaviest commissions. Over the course of four years, the account lost about a quarter of its value.

Strobel argued at the arbitration that her broker invested her funds inappropriately, given given her investment objectives, tolerance for risk and level of sophistication. The arbitration panel ruled in her favor, but awarded her only $5,000. Strobel, however, took the case to federal court and convinced the fedral judge to return the case to the arbitrators, so they can make a more appropriate award.