Award FINRA Dispute Resolution

In the ly atter ofthe Arbitration Between:

Claimant Amit Gupta

Case Number 11-00951

vs.

Respondents l\/lorgan Stanley & Co., Inc. l\ organ Stanley Capital Group, Inc.

Hearing Site: New Yori<, New Yori<

Nature ofthe Dispute: Associated Person vs. Member and Non-Member

REPRESENTATION OF PARTiES

Claimant Amit Gupta, hereinafter refen-ed to as "Claimant": Eric Seller, Esq., Amy C. Brown, Esq., and Christopher M. Colorado, Esq., Friedman Kaplan Seller & Adelman LLP. New Yori<, New Yoric.

Respondents Morgan Stanley & Co., Inc. ("Morgan Stanley") and Morgan Stanley Capital Group, Inc. ("Morgan Stanley Capital"), hereinafter collectively refened to as "Respondents": Michael Cariinslcy, Esq., John S. Gordon, Esq., Jennifer J. Barrett, Esq., Nicholas J. Calamari, Esq., and Rachel E. Epstein, Esq., Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York.

CASE INFORMATION

Statement of Claim filed on or about: March 3,2011. Amit Gupta signed the Submission Agreement: March 3, 2011.

Joint Statement of Answer filed by Respondents on or about: August 23,2011. Morgan Stanley & Co., Inc. signed the Submission Agreement: August 16, 2011. Morgan Stanley Capital Group, Inc. did not sign the Submission Agreement

CASE SUIMMARY

Claimant asserted the following causes of action: breach of contract and unjust enrichment

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

FINRA Dispute Resolution Arbitration No. 11-00951 Award Page 2 of 5

RELIEF REQUESTED

In the Statement of Claim, Claimant requested compensatory damages in an amount to be detennined at hearing, but in no event less than $14,000,000.00; unspecified damages for lost earnings; pre-judgment interest; costs and reasonable attomeys' fees, and such other relief to which Claimant may be entitled.

At the hearing, Claimant requested:

a) compensatory damages for the Defenred Cash Award (2008) in the amount of $1,844,331.00;

b) Stock Units Award (2006-2008) in the amount of $4,697,287.00; c) 9% statutory interest on the Defened Cash Award (2008) and the Stock Units

Award (2006-2008) in the amount of $1,469,911.00 as calculated through June 24. 2013;

d) value of Stock Options in the amount of $2,443,936.00; e) bonus for 2009 in the range of $2,800,000.00 to $3,400,000.00; f) lost earnings (2010-2012) in the range of $10,500,000.00 to $14,240,000.00; g) and declaratory judgment that Claimant was not tenninated "for Cause".

Respondents requested that the Panel dismiss the Statement of Claim in its entirety, and award Respondents attorneys' fees, costs, and such other and further relief as the Panel deems equitable.

OTHER ISSUES CONSIDERED AND DECIDED

The Arbitrators in this matter were duly selected.

Respondent Morgan Stanley Capital did not file with FINFRA Dispute Resolution a properly executed Submission Agreement but having answered the claim, appeared and testified at the hearing, and agreed to FINIRA's jurisdiction, is bound by the detennination of the Panel on all issues submitted.

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 testimony and evidence presented at the hearing, the Panel has decided in full and final resolution ofthe issues submitted for detennination as follows:

1. Respondents are jointly and severally liable for and shall pay to Claimant compensatory damages in the amount of $8,011,529.00 on Relief Request Items (a), (b) and (c), plus additional interest on items (a) and (b) at the rate of 9% per annum from June 24, 2013 to the date of this Awanj.

2. The Panel finds that Respondents' decision to tenninate Claimant "for Cause" was invalid.

FINRA Dispute Resolution Arbitration No. 11-00951 Award Pace 3 of 5

3. Any and all relief not specifically addressed herein is denied.

ARBITRATORS' REPORT

Although the Parties have not jointly requested an explained decision under Section 13904(g) ofthe FINFRA Rules; pursuant to Section 13904(f) of those Rules, arbitrators John W. Bissell and Donald A. Robinson present the following rationale underiying this Award:

Respondents' tennination of Claimant "for Cause" (on September 17.2009) with the ensuing impact of depriving him of previously earned defenred compensation, was invalid because the decision makers, inter alia, failed to consider tiie tenninology of relevant conti-actual documents bearing upon their decision, felled to abide by their obligations to Claimant a fellow employee, under the Morgan Stanley Code of Conduct, and felled to consider many relevant facts and circumstences particular to the question of whether tiijs Claimant should be tenninated "for Cause". Ratiier. as revealed expressly in the record, these decision makers did not care about any particularized or mitigating circumstances that might persuade them to reach a different result, including the many months of Mr. Gupta's cooperation with Morgan Stanley, the Manhatten District Attomey and the CFTC whicii preceded his decision not to attend one meeting with the District Attomey on September 15. 2009. The evidence demonstrates that this latter fact alone drove the decision to terminate Mr. Gupta "for Cause" as a "black and white" decision to use the "hammer" on Mr. Gupta. (Of course, even though Mr. Gupta might have had reason to believe that he might be tenninated "for Cause", tiiis fact neither made that result inevitable nor compromised his right to contest it in this Arbitration.) To reiterate, Mr. Gupta received no fair, reasoned, fully-infonned. individualized consideration of his circumstences. The decision to terminate him "for Cause" was so flawed that it does not constitute valid action by Morgan Stenley. As such. Respondents breached their contractual obligations to Mr. Gupta who is entitled to an Award ofthe deferred compensation which Respondents declared forfeited, plus interest under New York law (CPLR §§ 5001(a). (b)). As steted above, these sums totel $8,011,529. Claimant, an at-will employee, however, has failed to carry his burden of proof as to his claim for a bonus for the year 2009 and lost income for the years 2010 through 2012. Also, the stock options which he held were "under water" and remained so during the years after Claimant's tennination; therefore, though forfeited, those stock options were of no value.

FEES

Pursuant to the Code, the following fees are assessed:

Filing Fees FINFRA Dispute Resolution assessed a filing fee" for each claim:

Initial Claim Filing Fee = $ 1,800.00

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

FINRA Dispute Resolution Arbitration No. 11-00951 Award Page 4 of 5

Member Fees Member fees are assessed to each member finn that is a party in these proceedings or to the member finns that employed the associated persons at the time of the events giving rise to the dispute. Accordingly, as a party, Morgan Stenley & Co., Inc., is assessed the following:

Member Surcharge = $ 3.750.00 Pre-Hearing Processing Fee = $ 750.00 Hearing Processing Fee = $ 5,500.00

Administrative Fees Administrative fees are assessed to each separately represented party participating in the Large Case Pilot Program. Accordingly, Claimant and Respondents are each assessed a $1,000.00 administrative fee.

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

Two (2) Pre-hearing sessions with Panel @ $1,200.00 - $ 2,400.00 Pre-hearing conferences: October 10,2011 1 session

March 21,2012 1 session

Twenty-three (23) Hearing sessions @ $1,200.00 = $27,600.00 Hearing Dates: April 29,2013 2 sessions

April 30,2013 2 sessions May 1, 2013 2 sessions May 2, 2013 2 sessions May 3, 2013 2 sessions May 6, 2013 2 sessions May 7, 2013 2 sessions May 8, 2013 2 sessions May 14. 2013 2 sessions May 15. 2013 2 sessions June 4,2013 2 sessions June 24. 2013 1 session

Total Hearing Session Fees = $30,000.00

1. The Panel has assessed $15,000.00 ofthe hearing session fees to Claimant, less a credit of $7,350.00, for a balance due of $7,650.00.

2. The Panel has assessed $15,000.00 ofthe hearing session fees jointly and severally to Respondents, less a credit of $7,350.00, for a balance of $7,650.00.

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

Attomeys' fees, the fees ofthe Arbitrators paid through FedArb, and FedArb's fees are to be borne as incurred.

RNRAOi»utBR««fWllioi}

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JohnW,8ia8eii John 8. IMHtin DCHialdARolinison

Pubiio Aibitiafcir. Prssiding Chaftpeison PubSeAibBnator PubOc ArbrbBtDT

MteuTuJersigned Arbilr^ Practice Law and R«tes, th« I am the ftielMduBldescribed h e ^ instnimanf wMct) Is my award.

Com Arbttatois' Skmaturea

ohn W , Pr ^dlng Chaiiperscvt

DmaHA, Rolnnson F ibfic Arbttrator , Signature Oate

John S. Marttri. Art}ftnaftDr. dissente in an 0 (4^ attached hereto.

q Arbitrator Skmafairo

ubiic Aibttrator

)3

August 29, 2013

Date of Sendee (For FINRA C&pute Resoiutibn office use only)

FINRA Oispute Resolution Arbitration No. 11-00851 Award Page S of 5

ARBITIRATION PANEL

John W. Bisseii - Public Arbitrator, Presidir Chairperson John S. Martin Public Aribitrator Donald A. Robinson - PubllcArbitrator

1, the undersigned Arbitrator, do hereby affirm, pursuant to Article 7507 of the Civil Practice L.aw and Rules, tiiat i am the indhnduai described herein and who executed tiiis instrument which is my award.

Concurring Arbitrators' Signatures

John W. Bissell Signature Date PubllcArbitrator, PresWIna Chairperson

Donald A. Robinson Signature Date PubllcArbitrator

John S. I\4artin, Arbiti-ator, dissents in an Opinion attached hereto.

Dissenting Arbitrator's Signature

John S. iViartin Signature Date Public Arbitrator

August 29, 2013 Date of Service (For FINIRA Dispute Resolution office use only)

John S. Martin* dissenting:

INTRODUCTION Amit Gupta appears to be a very nice man and it is not difficult to be

sympathetic to the quandaiy that he confronted in the summer of2009. At that time he was a highly compensated energy trader at Morgan Stanley who over the course of his employment at Morgan Stanley had earned over $64 million in total compensation. In Febmary of2009 he had played a central role in a large trade which became the subject of an investigation by tho CFTC and the District Attomey of New Yoric County and the investigators had asked to interview him. As Mr. Gupta was well aware, Morgan Stanley's Code of Conduct required all of its employees to cooperate fully with any governmental investigation and to agree to be interviewed by the authorities when requested. If an employee did not fully cooperate or refused to be interviewed by the authorities, the employee could be terminated for "Cause" which would result In die forfeiture of any deferred compensation.

When Mr. Gupta's experienced criminal counsel contacted the Assistant District Attorney concerning the request to interview Mr. Gupta, he told her he believed Mr. Gupta had committed "a pretty clear violation" of die criminal law. TR. 2978-79. Tlicrc followed a series of conversations between Mr. Gupta and his criminal and regulatory counsel in which they carefully considered the risks that Mr. Gupta faced if he submitted to the interview and the fact that, if he did not, he would be violating Morgan Stanley's Code of Conduct and could be fired for cause and lose his deferred compensation. Ultimately, the decision was made that Mr. Gupta would refuse to meet with the District Attomey and the CPrC, as he had been directed to do by Morgan Stanley. When Mr. Gupta's superiors at Morgan Stanley learned that he had violated the Code of Conduct by refusing to be interviewed by the authorities, his employment was terminated for Cause and his defenred compensation was forfeited.

Despite the District Attorney's original statements that Mr. Gupta had committed a clear violation of New York law, his counsel ultimately persuaded the District Attorney and the CFTC to close their investigations without bringing any charges against Mr. Gupta.

While the above facts may make it appear harsh that Mr. Gupta should forfeit $1,844,331 in deferred cash compensation and stock units having a value of $4,697,287 when no charges were ever brought against him, sympathy for Mr. Gupta's plight does not justify disregarding the clear terms of his employment contract and the relevant deferred compensation plans as the majority does.

DISCUSSION The majority attempts to justify its decision to ignore the plain language of

Morgan Stanley's Code of Conduct and the relevant deferred compensation cenificates with the cryptic statement:

Respondents' termination of Claimant "for Cause" (on September 17, 2009) with the ensuing impact of depriving him of previously earned deferred compensation, was invalid because the decision makers, inter alia, failed to consider the terminology of relevant contractual documents bearing upon that designation, failed to abide by their obligations to Claimant, a fellow employee, under the Morgan Stanley Code of Conduct, and failed to consider many relevant facts and circumstances particular to tho question of whether this Claimant should be terminated "for Cause".

However, a careflil review of die relevant contractual provisions and the undisputed evidence demonstrate that Morgan Stanley had the right to terminate Mr. Gupta for Cause and to forfeit his deferred compensation and diat there is no basis in the relevant document and this record for the majority's decision to the contrary.

Tliere arc few tilings more basic to an employment relationship than the concept tliat an employee who refuses to obey a direct order of his superiors can be terminated for cause. As will be demonstrated below, there can be no question on this record that 1) Mr. Gupta was told by Morgan Stanley that they expected him to participate in an interview requested by the District Attomey and the CFTC; 2) a refusal by Mr. Gupta to participate in such an interview was a violation of Morgan Stanley's Code of Conduct that would justify his termination tor Cause: 3) Mr. Gupta understood that, if he refused to meet with tlie authorities as requested, he would be violating Morgan Stanley's Code of Conduct which could result in his being terminated for Cause and forfeiting his deferred compensation; 4) Mr. Gupta made a conscious choice, on the advice of experience counsel, to disobey his employer's direction to submit to an interview by the Disuict Attomey and the CFTC: and 5) when his superiors at Morgan Stanley learned of his refusal to submit to the interview he was terminated for Cause which resulted in the forfeiture of his deferred compensation.

I. Mr. Gupta was told bv Morgan Stanley that thev expected him to participate in an interview requested bv the District Attorpev and tlio CFTC

Laura Brevctti, Mr. Gupta's criminal counsel, testified that she was told by a representative of Morgan Stanley Uiat under Morgan Stanley's policies Mr. Gupta was expected to go in for an interview with die authorities when requested.

Q. When is the first time you came to understand that Morgan Stanley expected Mr. Gupta to go in for the interview requested by the DA and CFTC'.> A. 1 think from the beginning 1 had an understanding that it would be tiieir desire and policy in • in all investigations. And diis being - Uiis not being an exception. Q. And Mr. Meister specifically told you tiiat Morgan Stanley expected Mr.

Gupta to go in when requested by die DA and die CFTC for an interview, correct? A. Yes. That they would want him to go in, yes.

TR. 2926.

2. A refusal bv Mr. Gupta to participate in such an interview was a violation of Morgan Stanlev's Code of Conduct that would justify his tcrmmarign for Cause.

Morgan Stanley's Code of Conduct states: During litigation, an internal investigation, or governmental, regulatory or adminisd-ative inquiiy ...we may ask you to provide information (including documents, statements or testimony) or to meet with ... governmental, regulatory or adminisiralive authorities. You must cooperate fully and provide truthful and complete information in connection with any such request (Emphasis added.)

Tlie Certificates governing tiie award of deferred compensation all provide that Morgan Stanley may cancel an employee's deferred compensation, even if vested, if, inter alia, the employee is terminated for Cause. "Cause," in turn, is defined in relevant part as:

(1) any act or omission which constitutes a breach of your obligations to the Fmn . . . or your foilurc or refusal to perform

satisfactorily any duties reasonably required of you. which breach, failure or refusal (if susceptible to cure) is not corrected (otiier than failure to correct by reason of your incapacity due to physical or mental illness) within ten (10) business days af er written notification tiicreof to you by tiic Finn: for) (2) your commission of any dishonest or fraudulent act, or any other act or omission, which has caused or may reasonably be expected to cause injury to the interest or business reputation ofthe Firm.

The Code of Conduct's requirement diat an employee meet witii the rcgulatore, when requested, is unequivocal as is the employees obligation to "cooperate fully" with such an investigation and a failure to do eidier is "a breach of [an employee's] obligations to the Firm" and, therefore, "Cause" for tennination and the consequent fortcimre of defemxl compensation.

3. Mr. GuPta understood that, if he refused tn meet with tho ftuthoritics as rCfltiCStCd, he would be violating Morgan Stanley's Cade of ConHnrt Whict) could result in his being terminated for cause and forfeiring l jj deferred compensation

Charles Mills, one of Mr. Gupta's attomeys. was questioned about notes of a meeting between Mr. Gupta and his counsel and testified as follows:

Q. On page 5364, Mr. Porter writes, "whctiier MS hears tiiat AG not coming in is noncoopcration." Do you see that? A. Yes Q. And that is a reflection of your .statement that when Morgan Stanley hears that he's not coming in will they deem thai noncooperation under the code of conduct, right. A. Yes,

TR.1936 Mr. Mills testified furthen

ARBITRATOR MARTIN: Were you aware at this lime that tiiere was a policy at Morgan Stanley tiiat if Mr. Gupta did not cooperate with tfie DA he would be terminated? Were you aware of tliat policy? THE WITNESS: Yes.

TR 1867. Ms. Brevctti gave similar testfanony:

Q. And you understood in tiiis case that Morgan Stanley was conveying to you that if Mr. Gupta didn't go in, he was going to get fired right? A. That's what they said to me.

TR. 2949 The lawyer's notes also reflect the fact that Mr. Gupta and his lawyers

discussed "if fired for cause, he loses everything deferred comp." JX 75A at 5434. What is striking about this note is that it was made at a meeting on July 24" which was about the time of his counsel's first contact with Uic District Attorney's ofllce. So from the earliest conversations about Moigan Stanley's direction that he meet with the District Anomey and tiie CFTC, Mr. Gupta and his counsel were well aware that, if he refused the direction to meet with the autlioritics, he would be fired for cause and lose his compensation.

4. Mr. Gupta made a conscious choice, on tiic advice of experience counsel to refuse to submit to an interview bv the District Attorney and the CFTC

Mr. Gupta clearly understood that if he refused the request for an interview from the District Attomey and tiie CFTC he could be terminated for cause and would forfeit his deferred compensation. Mr. Gupta testified on direct examination:

Q. Did you think about the question of if the firm terminated you, what they would do to you with regard to compensation previously awarded? A. Only in such tiiat 1 was aware tiiat they could take it away.

Sec TR 2321-22 He gave similar testimony on cross examination:

Tiiey (his lawyers] did certainly make statements to die effect that if I left the firm was fired that I could potentially lose my stock.

TR. 2567-68 Mr. Gupta's decision to refuse the District Attorney's request tor an

interview with full knowledge that he would be terminated and lose his deferred compensation was made only after carcfiil consideration. The attorneys' notes admitted in evidence refiect substantial discussion by Mr. Gupta and his counsel

about his deferred compensation and possible alternatives for saving it. In the end, the decision to refuse the District Attorney's request for an interview and forfeit the compensation was not a difficult one fbr counsel to recommend. Ms. Brevctti's testimony was clear:

ARBITRATOR MARTIN: Are you saying whether or not he lost that compensation was not important? THE WITNESS: It was not important to me. ARBfTRATOR MARTIN: The only thing that was important was whether or not you were exposing him to criminal liability by bringing him in. THE WITNESS: Yes.

TR 2977

5. As Mr. Gupta anticipated, when his superiors at Morpan Stanley learned of his refusal to submit to the interview he was rcmiinated for Cause which rcsuhed in the forfeinire of his deferred compensation.

Mr. Gupta learned in the middle of July 2009 that the District Attomey had joined the CFTC in the investigation into the Februaiy trade. At that time Ms. Brevctti. a criminal law specialist, joined Iiis defense team. Sometime before the end of tiiat month she contacted tho District Attorney's ofTicc and was told tiiat tiiey wished to interview Mr. Gupta. Counsel successfully deferred any interview of Mr. Gupta for a period of time but in cariy September she was told the District Attorney liad set September 15 as a deadline for her to bring her client in for an interview. TR. 2878. On September 14* Ms. Brevctti told the District Attomey tiiat she would not produce her client for an interview. JX 109. Ms. Brevctti also notified David Meister, an outside counsel for Morgan Stanley of her client's decision not to be interviewed by tiie District Attomey and die CFTC. TR. 961-62.

Even before Mr. Gupta made his final decision not to be interviewed, Morgan Stanley's in-house counsel recognized that he might refuse to cooperate and there was a discussion between Zachary Stem, an attorney in the U.S. litigation group, and Morgan Stanley's General Counsel, Eric Grossman, about the possible consequences of such a refusal. Mr. Stem testified that it was his recommendation that, if Mr. Gupta refused die request for an interview, he should be fired. TR 943. Mr. Stem testified dial the decision to terminate Mr. Gupta's employment was tiie natural consequence of his refusal to meet with the autlioriticsr

ARBITRATOR MARTIN: As for as you recall, during your communications with Mr. Grossman, was diere any debate about whether or not it was appropriate to do this, or was this kind of automatic. THE WITNESS: Definitely the latter. ARBITRATOR ROBINSON: automatic in what sense? WITNESS: That die necessary recommendation to fiow fiiom Mr. Gupta's failure to cooperate was his termination for cause.

TR 937. When Mr. Stem learned from Morgan Stanley's outside counsel that Mr.

Gupta had in fact refused to meet the District Attorney's deadline for his interview, he communicated that fact to Mr. Grossman who then conferred with Mr. Gupta's immediate supervisor, Mr. Greenshields. They both agreed that Mr. Gupta should be fired. Like Mr. Stem, they botii considered that the reflisal to meet witii tiie regulators made the decision to terminate the employment automatic. Mr. Greenshields testified:

A. Well, first of all, I don't believe, at least to my knowledge, there ever has been an exception on tills. 1 think failure to cooperate with a regulatory inquiry has always resulted in the dismissal of the employee historically. So I didn't feel 1 didn't even think about that because I didn't feel tiiat I had any latitude.

TR4I3. Mr. Grossman's testimony was to the same effect:

A. If you have an appointed time to be interviewed or to testify by the government and you do not comply with that request and do not get tiieir agreement that you could come at some otiier time, then we terminate you for cause that's just that is black letter law, we do have to enforce that law and we do.

TR. 1295. Given this record it is impossible to understand how die majority can find

that Morgan Stanley did not have the right to terminate Mr. Gupta for Cause. Under the Code of Conduct and deferred compensation plans Mr. Gupta clearly violated his duty to comply with his employers direction tiiat he meet with the District Attorney and the CFTC and was properly terminated fbr Cause. The consequence was that he forfeited his deferred compensation. The fact that the majority is unhappy with tiiis result docs not justify its disregard of the goveming cotitracts.

Despite Mr. Gupta's clear violation of Morgan Stanley's Cbdc of Conduct by refusing to be interviewed by government regulators, and the fact diat his attomeys were told that if he did not participate in tiiat interview he would be fired, the majority apparently believes that he was treated unfairly. Morgan Stanley's code of conduct docs state: **We are committed to dealing fairly with clients, the public, competitors, suppliers and one another." However, nothing in the "Fair Treatment" section of the Code suggests tiiat it would be unfair for Morgan Stanley to enforce otiier clear provisions of the Code, such as the provision diat an employee must meet with regulators when requested.

While the ci ptic rationale of die majority suggests that it was unfair for Morgan Stanley to make a termination automatic when an employee refused to cooperate witit the regulatory investigation, Mr. Gupta's attomey Ms. Brevctti testified:

ARBITRATOR MARTIN: Was it your experience in financial services industry that if an employee refused to go when, that they would normally fire tiicm as a result of refusal to cooperate with the government? THE WITNESS: The answer is. an absolute refusal, yes.

TR 2946^7. How can it possibly be unfair to apply a clear mle that an employee will be

fired for cause if you fail to cooperate with the government authorities to an employee who is told in advance tiiat it is his duty to cooperate and that he will be fired if he refbscs to do so.

The majority appears to believe that Mr. Gupta's clear violation of the Code of Conduct, with notice of all of the consequences that would fiow from his action, should be ignored because the decision-makers did not consider his earlier cooperation in Morgan Stanley's intemal investigation or his limited cooperation with the investigation by the CFTC and die District Attomey. Of course, the majority does notliing to demonstrate where in die Code of Conduct there is anything to suggest that an employee is relieved of his obligation to meet with the governmental authorities if he has otiierwise cooperated in their investigation or in Morgan Stanley's intemal investigation. Indeed, the Code of Conduct does not make it an excuse to provide some cooperation in cither an intemal or govcmmcnt investigation. To the contrary the Code imposes on the employees the obligation to "cooperate fully" in both types of investigation. Thus it cannot mitigate and employees obligation to "cooperate fully" that the employee cooperated less than fully widi those investigations.

In any event, there is no evidence that the decision-makers were unaware of Mr. Gupta's eariier cooperation in die investigation or that diere was anytiiing so unusual about that cooperation that would justify excusing Mr. Gupta's deliberate violation of his obligation to be interviewed by die regulators and cooperate fully with them. While there is no testimony that die decision-makers specifically considered Mr. Gupta's earlier cooperation in the investigations when they decided to fire him, the decision was not a snap judgment. As noted above Mr. Stem testified that, even prior to Mr. Gupta's decision not to submit to die interview by tlie District Attorney and the CFTC. he and Mr. Grossman discussed tiiat possibility and it was his recommendation that Mr. Gupta should be terminated for cause for violating the Code of Conduct. Between that conversation and September 14"' when Mr. Stem and Mr. Grossman discussed die fact die Mr. Gupta's counsel advised Mr. Stem that Mr. Gupta had refused to be interviewed by the District Attomey and the CFTC, they had ample time to consider whotiier a decision to terminate him was fair.

In any event, there was little about Mr. Gupta's cooperation that should have caused the decision makers to hesitate to terminate his employment. First, as noted above, the Code of Conduct required Mr. Gupta to cooperate in investigations and to Uie limited extent that he did so, he was doing no more than was required of him by his employer. In addition, the record indicates that his cooperation in Morgan Stanley's investigation was less than might have been expected and diat tiierc was almost no cooperation with the CFTC investigation, after die District Attomey became involved.

Mr. Stem, one of Morgan Stanley's in-house attorneys, testified that he was not happy with Mr. Gupta's interview in the intemal investigation:

Q. Were you dissatisfied [with Mr. Gupta is interview]? A. Yes. Q. In what way? A. My impression was that he treated the interview like a deposition, answered only the questions asked in a limited fashion, was evasive and didn't provide in every instance the robust responses 1 would expect from an employee of the firm, especially the senior employee of die firm like Mr. Gupta was at the time.

TR847 Mr. Stem conveyed tiiis impression of Mr. Gupta's interview to Morgan

Stanley's General Counsel. Mr. Grossman. Hius, to die extent Mr. Gupta's cooperation in Moigan Stanley's internal investigation should have been considered prior to his termination for cause. Mr. Grossman was aware of it and

that cooperation would not have caused a rational decision-maker to change the decision.

Similarly, Mr. Gupta's cooperation with the investigation by die CFTC and District Attorney would not have been provided a reason to change the decision to terminate him for cause for failing to follow his employer's direction diat he meet with the governmental authorities. While Mr. Gupta did participate in conference calls widi die CFTC, in die period shortly after the trade, once die District Attorney became involved Mr. Gupta provided no mcaningfiri cooperation. His attomeys had only one meeting witii tiie District Attorney and CFTC and it is clear from Ms. Brevctti's testimony concerning that meeting tiiat she provided very little information to the investigators and spent most of tiic time trying to leam what they wanted to ask her client Tr. 2864-2873. The critical information that the investigators wanted—why Mr. Gupta did what he did—was withheld. Tr.3038. Sec also Tr.3016-3022.

Thus, tiiere was nodiing about Mr. Gupta's cooperation in eitiicr Morgan Stanley's investigation or the investigation by die District Attorney and die CFTC that militated against the decision to fire him or failing to comply with his employer's order that he meet with the government investigators.

It is worth noting that the majority faults die decision-makers for not considering Mr. Gupta's cooperation in the investigations but does not state that, if the cooperation had been considered, the result should be different. It is evident therefore, that the only real problem the majority has is that they do not sigrec with Morgan Stanley's policy of terminating for Cause anyone who fails to cooperate in a regulatory investigation. While reasonable people can disagree about the wisdom of tiiat policy, it is not for arbitrators to disregard the unambiguous language of contracts simply because they do not like the result.

In sum, Morgan Stanley had every right to expect Mr. Gupta to comply with tlie Code of Conduct and cooperate fully with the investigation being conducted by the District Attomey and the CFTC. When he refused to do so, there was nodiing unfair about the decision his superiors made to terminate him for cause. Morgan Stanley did no more than apply to Mr. Gupta the unambiguous rules goveming his employment and that of everyone else employed in the financial services industry.. If there is anything tiiat is unfair in tiiis proceeding, it is the decision ofthe majority to cliange the rales aflcr die game has been played.

For ail of the foregoing reasons I would dismiss all of Mr. Gupta's claims.

JOHN S. MARTIN, under penalties of perjury, duly affirms that he is

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the ArtJitrator described herein, and tiiat he executed the foregoing instramcnt.

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