Morgan Stanley Beats Lawsuit Over Annuity Distribution Advice

Morgan Stanley & Co. and a financial adviser defeated a lawsuit accusing them of providing bad advice to three annuity beneficiaries about their options for disbursements.

The beneficiaries said the advice led them to cash out their annuities in a lump-sum payout that caused them to incur nearly $300,000 in tax liabilities.

Judge Paula Xinis of the U.S. District Court for the District of Maryland said the financial adviser, who was a Morgan Stanley employee, breached his duty because he didn’t research the beneficiaries’ disbursement options and advise them accordingly. But Morgan Stanley and the adviser ultimately weren’t liable because ...