Morgan Stanley Sued by Ex-Advisor Over Discrimination, Retaliation

Elizabeth Hobson, a former Morgan Stanley advisor, sued the wirehouse in North Carolina federal court, alleging gender and disability discrimination, retaliation, and the disclosure of her confidential address.

Hobson said the firm disclosed her address to coworkers despite her enrollment in North Carolina's Address Confidentiality Program, which shields domestic violence survivors. She claimed a manager pressured her to display surgical incisions from neck surgeries.

The trouble began after Morgan Stanley hired Jeremy McPherson in 2023. McPherson had faced harassment allegations from another advisor, Dana Timchenko, at UBS. Hobson said her market executive, Curtis Mason, hired McPherson despite knowing the allegations. After Hobson raised concerns, she said her supervisors retaliated.

In 2023, Morgan Stanley's human resources department demanded proof of her protective order and insisted her real address be sent to FINRA. Hobson objected. Days later, the firm emailed her address and personal number to multiple employees and refused to recall the message.

In January 2024, Branch Manager Robert Pawlowski called Hobson into his office. He questioned her about her neck injuries and asked to see the incisions. Hobson said she felt pressured and eventually lifted her hair and removed her coat to show them. Pawlowski also inquired about her domestic violence history and made comments about her father.

Throughout her health struggles, Hobson said her superiors stripped client accounts from her and directed them to McPherson. Pawlowski allegedly told a male colleague that Hobson would not last much longer and tried to give the colleague her clients. The colleague refused. Hobson estimates $40 million in client assets was transferred away from her book following Timchenko's departure.

After she filed her complaint, Hobson said her short-term disability claims were denied and her family's health insurance was cut off without notice. She resigned in June 2025. FINRA records show she is now registered with LPL Financial.

Morgan Stanley said in a statement that it is "committed to providing equal employment opportunities and to fostering a workplace that is fair and respectful." The firm said it intends to "vigorously defend ourselves in the appropriate forum."

Morgan Stanley carries an AlphaScala score of 60 out of 100, labeled Moderate, reflecting average fundamentals and moderate risk relative to its financials sector peers.

The lawsuit seeks back pay, lost deferred compensation, trailing revenue, and punitive damages. A settlement or dismissal would reduce the legal overhang. Additional plaintiffs or regulatory findings could deepen the risk. The case is pending in the U.S. District Court for the Western District of North Carolina.