(Dow Jones) A former broker for Morgan Stanley & Co. must pay $1.6 million to the firm in a case involving a signing bonus he received when he joined in 2006, according to a securities arbitration-panel award.

A Financial Industry Regulatory Authority panel ordered Thomas G. Hicks III, a former broker in Salt Lake City, Utah, to pay back the bonuses, which were secured by three promissory notes, according to the award dated April 6.

The bonuses that were handed out to brokers joining the top firms a few years ago are now becoming a point of contention as those who leave the firms face legal challenges. Because of the financial crisis, many advisers can't afford to repay the money they owe.

Signing bonuses for brokers typically come in the form of loans that are forgiven in installments annually, until they are completely forgiven after about 10 years. The forgivable loans are secured by promissory notes, so that if brokers leave, voluntarily or involuntarily, before the term is up, they have to repay the remainder of the bonus.

About two years ago, Hicks was ordered to pay $1.7 million to UBS Financial Services, in a similar case involving bonuses. Hicks was given a $1.2 million signing bonus in the form of a 10-year forgivable loan when he joined UBS in 2000 at the Salt Lake City branch office, according to court documents.

Hicks left UBS for Morgan Stanley in 2006. A Morgan Stanley spokeswoman confirmed at the time that he produced $1.7 million in commissions and fees during his previous 12 months at UBS, and had around $200 million in client assets.

In 2008, a Finra arbitration panel ordered Hicks to pay UBS more than $1.7 million for the remainder of his forgivable loan. Hicks argued the brokerage didn't pay his commissions for referring two companies that ultimately cut deals with UBS. The panel awarded Hicks $161,000.

Hicks then filed a proceeding in a Utah state court to overturn the $1.7 million award in the UBS case.

A Utah trial court sided with Hicks in July, 2008, overturning the arbitration panel's award. But in February, an appeals court reinstated the original $1.7 million award that Hicks had been ordered to pay to UBS.

Morgan Stanley filed its case against Hicks in 2008, alleging breach of three separate promissory notes for the signing bonuses he received. Morgan Stanley originally sought more than $2 million, including interest on the notes, but was awarded $1.6 million, which includes Morgan Stanley's legal fees, costs, and $196,000 in interest.

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