Dale Cebert was managing over $400 million for Morgan Stanley Smith Barney when the bank fired him. That wasn’t the only blow. The bank also claimed he had drawn multiple customer complaints and run a side business without approval -- allegations it put on his online employment record for anyone to see.

Insisting those allegations were bogus, Cebert fought back. Arbitrators ultimately found the bank flubbed an investigation of him, was “grossly negligent” and possibly “malicious” in communications with his clients and put inaccurate information in his employment record, according to their ruling. He got a multimillion-dollar award plus something else that’s rare in his business: He got his old employer to clear his record.

Cebert is part of a tiny group of brokers who’ve tried to force an ex-employer to expunge reputation-damaging disclosures -- and among an even smaller handful who’ve prevailed. Plaintiffs’ lawyers and others say most investment advisers choose not to expend the time and money it takes to clear their records. Cebert spent almost $2 million on legal fees, with no guarantee of success.

His experience hints at how the public broker record, meant to help investors shop for investment advisers, may in fact be pockmarked with inaccurate slights against brokers.

“Unfortunately, many advisers who feel they were wrongfully terminated aren’t in a position to fight,” Cebert said, adding that he wonders how many others in his position lack the resources.

Morgan Stanley, in a written statement, said: “We disagree with the panel’s decision regarding this case. In particular, we stand behind the quality and thoroughness of the internal investigation that resulted in Cebert’s termination.” The bank declined to comment more broadly about its use of broker employment reports.

Outlier Industry

In making grievances about ex-employees public, the brokerage business is an outlier. Employers in other industries tend to keep quiet about departing workers for fear of litigation.

The brokerage business, by contrast, is required by regulators to report the reasons for each adviser firing using a so-called U-5 form that is transmitted to other brokerages. Those reasons are also added to broker records on BrokerCheck, a website meant to help investors avoid bad actors.

But some brokers and lawyers who represent them say that banks may also use the public comments to wrongly undercut the brokers -- often in an effort to hobble their chances of taking business with them on the way out the door. That makes it another front in a long-running war between investment firms that aim to keep departing advisers from taking clients with them, and the brokers who say their hard-won client relationships should be portable.

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