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Targets of a Failed Morgan Stanley Restraining Order Ask Court to Toss Lawsuit Too

By Miriam Rozen October 8, 2018

Six financial advisors who earlier this month jumped from Morgan Stanley to Stifel Financial filed a motion last week to dismiss their former employer’s lawsuit against them.

In their motion, the advisors argue Morgan Stanley’s lawsuit failed to include “a short and plain statement showing that it is entitled to relief” and that its claims relied upon “speculation, suspicion, conjecture, guesses, and hunches.”

One week prior to the six filing the dismissal motion, the federal judge presiding in the litigation in Illinois had denied Morgan Stanley’s request for a temporary restraining order barring the FAs from soliciting their former clients.

In its lawsuit, Morgan Stanley alleges the six former advisors – who had managed $660 million in client assets for the wirehouse working from an office located in Bourbonnais, a town south of Chicago – wrongfully solicited its customers, took customer data, and breached their fiduciary duties, all claims the advisors deny.

Represented by lawyers from the Chicago-based firm Sperling & Slater, Morgan Stanley sought the TRO and alleged in a complaint that since the team members resigned en masse, they have been soliciting its clients, initiating numerous telephone calls and personally meeting with clients. As a result of the defectors’ calls, “clients have also been asking Morgan Stanley if the Bourbonnais office is closing or if Morgan Stanley is going bankrupt,” Morgan Stanley’s complaint alleged.

(iStock Photos)

A Morgan Stanley spokeswoman declined to comment about the six advisor’s motion.

Gary Blackman, a lawyer from Chicago’s Levenfeld Pearlstein, who represents the advisors, did not provide a comment by press time.