Award FINRA Dispute Resolution

In the Matter of the Arbitration Between:

Claimants Case Number: 12-02068 Marshall Ferris Glenda Ferrris Glenda Ferris IRA Marshall Ferris IRA

vs.

Respondents Morgan Stanley Smith Barney LLC NYLife Securities LLC Thomas W. Howes

Hearing Site: Atlanta, Georgia

Nature of the Dispute: Customers vs. Members and Associated Person

This case was decided by an all-public panel.

REPRESENTATION OF PARTIES

For Claimants Marshall Ferris, Glenda Ferrris, Glenda Ferris IRA and Marshall Ferris IRA: Richard J. Edson, Esq., Law Offices of Richard J. Edson, Sacramento, California and Ronald E. Miller. Representative, Loss Recovery Center, Inc., Reno, Nevada..

For Respondent Morgan Stanley Smith Barney LLC: Joseph L. Calabrese, Esq., Morgan Stanley Smith Barney, New York, New York.

For Respondent NYLife Securities LLC: H. Sanders Carter, Jr., Esq., Smith Moore Leathen/vood, LLP, Atlanta, Georgia.

Respondent Thomas W. Howes appeared pro se.

CASE INFORMATION

Statement of Claim filed on or about: May 30. 2012. Marshall Ferris signed the Submission Agreement: May 20,2012. Glenda Ferrris signed the Submission Agreement: May 20, 2012. Glenda Ferris IRA signed the Submission Agreement: May 20,2012. Marshall Ferris IRA signed the Submission Agreement: May 20, 2012.

Statement of Answer filed by Respondent NYLife Securities LLC on or about: August 1, 2012. Statement of Answer filed by Respondent Morgan Stanley Smith Barney LLC on or about: September 10, 2012.

FINRA Dispute Resolution Arbitration No. 12-02068 Award Page 2 of 5

Statement of Answer filed by Respondent Thomas W. Howes on or about: September 11.2012. NYLife Securities LLC signed the Submission Agreement: July 31, 2012. Morgan Stanley signed the Submission Agreement: September 7. 2012. Thomas W. Howes signed the Submission Agreement: September 24, 2012.

Motion for Expungement filed by Respondent Thomas W. Howes on or about: October 30, 2013.

CASE SUIVIMARY

Claimants asserted the following causes of action: 1) breach of contract; 2) breach of fiduciary duty; 3) negligence; 4) breach of contract to supervise its broker. The causes of action relate to, among other things, the purchase of various Exchange Traded Funds in Claimants' accounts.

Unless specifically admitted their Answers, Respondents denied the allegations made in the Statement of Claim and asserted various affinnative defenses.

RELIEF REQUESTED

In the Statement of Claim, Claimants requested compensatory damages in the amount of $300,500.00, disgorgement, interest, costs, attorneys' fees, consulting fees, punitive damages and other and further relief as this Panel deemed just and proper.

Respondent NYLife Securities LLC requested that the Statement of Claim be dismissed in its entirety with prejudice, costs, expenses and such other and further relief as this Panel deemed just and proper.

Respondent Morgan Stanley Smith Barney LLC requested that the Statement of Claim be dismissed.

Respondent Thomas W. Howes requested that the Statement of Claim be dismissed, costs, attorney's fees and for such other and further relief as this Panel deemed just and proper.

OTHER ISSUES CONSIDERED AND DECIDED

The Arbitrators acknowledge that they have each read the pleadings and other materials filed by the parties.

On or about July 26, 2013, Claimants withdrew their claims against Respondent NYLife Securities LLC with prejudice.

On or about October 14,2013, Claimants notified FINRA Dispute Resolution that this matter had settled. Accordingly, the Panel made no detenninations with respect to any requests made In the Statement of Claim.

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On or about October 30,2013, Respondent Thomas W. Howes filed a Motion for Expungement of his Central Registration Depository ("CRD") record.

The Panel conducted a recorded telephonic hearing on December 12, 2013. so the parties could present evidence on Respondent Howes' request for expungement. Claimants did not appear at the expungement hearing and did not oppose the expungement request.

The parties have agreed that the Award in this matter may be executed in counterpart -copies or that a handwritten, signed Award may be entered.

AWARD

After considering the pleadings, the Motion for Expungement, the testimony and evidence presented at the recorded telephonic hearing, the Panel has decided in full and final resolution of the issues submitted for determination as follows:

1. The Panel reviewed the settlement documents, the amounts paid to any party and all other relevant terms and conditions of the settlement. Additionally, the Panel reviewed the account agreement, the Letter of Acceptance, Respondent's Fomri U4 and Respondent's Statement of Answer to the Claim. The Panel has determined that Respondent Howes' request for expungement is denied, with prejudice.

FEES

Pursuant to the Code of Arbitration Procedure, the following fees are assessed:

Filing Fees FINRA Dispute Resoiution assessed a filing fee* for each claim:

Initial Claim Filing Fee =$ 1,425.00

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firm(s) that employed the associated person(s) at the time of the event(s) giving rise to the dispute. Accordingly, as parties and member firms, Respondent Morgan Stanley Smith Barney LLC is assessed:

Member Surcharge 1,700.00 Pre-Hearing Processing Fee =$ 750.00 Hearing Processing Fee =$ 2,750.00

Respondent NYLife Securities LLC ts assessed:

Member Surcharge =$ 1,700.00 Pre-Hearing Processing Fee =$ 750.00 Hearing Processing Fee =$ 2,750.00

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Adjournment Fees Adjournments granted during these proceedings for which fees were assessed:

June 2 5 - 2 8 , 2013, adjournment by parties =$ 1,125.00

The Panel has assessed $562.50 of the adjournment fee jointly and severally to Claimants.

The Panel has assessed S562.50 of the adjournment fee jointly and severally to Respondents.

Hearing Session Fees and Assessments The Panel has assessed heanng session fees for each session conducted. A session is any meeting between the parties and the arbitrator(s), including a pre-hearing conference with the arbitrator(s). that lasts four (4) hours or less. Fees associated with these proceedings are:

One (1) Pre-hearing session with the Panel @ $1,125.00^ession = $1,125.00 Pre-hearing conference: December 20,2012 1 session

One (1) Hearing session on expungement request @ $1,125.00/session Hearina Date: December 12. 2013 1 session =$1.125.00 Total Hearing Session Fees = $2,250.00

The Panel has assessed $562.50 of the hearing session fees jointly and severally to Claimants.

The Panel has assessed $562.50 of the hearing session fees jointly and severally to Respondents.

The Panel has assessed the total hearing session fee in the amount of $1.125.00 for the hearing on Respondent Thomas W. Howes' request for expungement to Respondent to Thomas W. Howes.

All balances are payable to FINRA Dispute Resolution and are due upon receipt.

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FINF^ Dispute Resolution Arbitration No. 12-02068 Award Paoe S of 5

Sabrina Raquel Scott James C. Hoover Richard Merritt Langway

A R B I T R A T r O N P A N E L

Publ ic Arbitrator, Presiding Chairperson Publ ic Arbitrator Publ ic Arbitrator

I, the undersigned Arbitrator, do hereby affirm that I am the individual described herein and who executed this instrument which is my award.

C o n c u r r i n g Arb i t ra tors ' S igna tu res

Sabr ina Raquel Scott Public Arbitrator, Presiding Chairperson

Signature Date

James C . Hoover Public Arbitrator

Signature Date

Richard Merritt Langway Publ ic Arbitrator

Signature Date

r F INRA Di Date of Service (For Dispute Resolution office use only)

FINRA Dispulu <ui-olulion Arbitration No. 12-U20ba Award Page f) d ;>

Sabrina Ruquui Scolt James G. l-loover Richard (vlorritt Langway

ARBITRATION PANEL

Public Arbitrator, Presiding Chairperson Public Arbitrator Public Arbitrator

I, the unders gned Arbitrator, do hereby affirm that I am the individual described herein and who executed th s instrument which is my award.

Concurring / ibitratnrs' Signatures

Sabrina Raquel Scott iiG^rbitfLHor. PreGiding Chairperson Pu

'A Publ

/ Jame? C. Hoo.cr Arbitr ,ior

Signature Date

re Date nat

Richard Merr.lt Lanjjvvay Public Arbitrator

Signature Date

Date of Serv. .e (For I ii IRA Di::.pute Resolution office use only)

-TNRA DisDute Resoiulon Arbitration No. 12-020 J Award Page 5 of 5

.ARBITRATION PANEL

Sabrina Raquel Scott James C. Hoover Richard Merritt Langway

Public Arbitrator, Presiding Chairperson Public Arbitraioi Public Arbitrator

I. the undersigned Arbitrator, do hereby affirm that I am the individual described herein and who executed this instrument which is my award.

Concurring Arbitrutors' Signatures

Sabrina Raquel Scoit Public Arbitrator. Presiding Chairperson

Signature Date

James C. Hoover Public Arbitrator

RicKard Merritt L^fiawav Public Arbitrator

Signature Date

Signature Date

Date of Service (For FINRA Dispute Resolution office use only;