Morgan Stanley is seeking damages and a restraining order in an attempt to block one of their former brokers from taking clients to his new registered investment advisory practice, according to AdvisorHub.
Allegations of Irreparable Harm, LinkedIn Client Luring
The lawsuit, filed on 19 January 2018, argues that ex-employee Daniel J. Abel was subject to a joint production agreement, which bars him from using confidential proprietary information, the publication writes. Furthermore, it undermines his reputation by claiming that an inability to transition to the company led him to become support staff, according to AdvisorHub.
This follows a case filed the week before and three other successful restraining orders sought Morgan Stanley, the publication writes. It is now clear that the company is willing to strictly enforce ex-employees’ contracts, which have a one-year non-solicitation agreement and consent for restraining orders and injunctions, AdvisorHub writes. The cases follow Morgan Stanley’s exit from the Protocol for Broker Recruitment, which allows brokers to take five pieces of information about their clients when moving between signatories to the accord, according to the publication.
Morgan Stanley expects all employees to comply with contractual obligations and claims that it suffers “irreparable harm” from previous employees using confidential data, which they have alleged is illegally downloaded to external servers and databases, AdvisorHub writes. In Abel’s case, the lawsuit states that he resigned prior to a holiday weekend, a practice often encouraged by headhunters and employment lawyers, which allowed him to “wrongfully compete... in violation of his obligations while the firm was unaware that he resigned,” the publication writes.
Additionally, the lawsuit alleges that Abel attempted to reach several clients, who together have an estimated $18 million in assets at Morgan Stanley, through an announcement on LinkedIn, AdvisorHub writes. Furthermore, an accompanying affidavit claims that Abel contacted clients he was servicing before his resignation, the publication writes.
The lawsuit seeks a temporary preliminary injunction, the return of proprietary information and unspecified damages, according to AdvisorHub. It cites four counts of wrongdoing, including Abel’s alleged violation of Florida’s Deceptive and Unfair Trade Practices Act, the publication writes. Morgan Stanley also looked for a more long-term solution by filing an arbitration complaint with the Financial Regulatory Authority as it has done in previous cases, according to AdvisorHub.
