Morgan Stanley, which recently left the Broker Protocol, wants its brokers to know it will go after them if they try to take clients to another firm, no matter how many -- or how few -- assets those clients have with the wirehouse, according to AdvisorHub.
This week the company submitted a federal court filing in New Jersey for a temporary restraining order and injunction against John Louis Fitzgerald, who had just left the firm on Friday for independent broker-dealer Commonwealth Financial Network, the website reports. Morgan Stanley also filed a parallel arbitration complaint against Fitzgerald, asking for a permanent injunction as well as damages, AdvisorHub writes.
The complaint accuses the advisor of contacting Morgan Stanley clients by phone and email within an hour of his resignation and cites one client who said he or she expected to be contacted, according to the website. David Gehn, a lawyer at Ellenoff Grossman & Schole, tells AdvisorHub he would have expected a “substantive affidavit” from an advisor or manager attesting to solicitation or misconduct, which isn’t the case in Morgan Stanley’s complaint against Fitzgerald, he says.
Judging by his biographical information, Fitzgerald was likely not a large producer at Morgan Stanley, AdvisorHub muses. Lawyers tell the website that the wirehouse is showing its muscle to its rivals as well as its brokers, regardless of their assets under management.
“From an optics point of view, Morgan Stanley is sending the message that it’ll look real close and get aggressive,” Tom Lewis, a lawyer with Stevens & Lee who represents brokers against firms, tells the website.
A spokeswoman for Commonwealth, which isn’t a signee to the protocol, didn’t respond to AdvisorHub’s request for comment. A Morgan Stanley spokeswoman and Fitzgerald both declined comment to the website.
This isn’t the first time Morgan Stanley has gone after a broker since leaving the Broker Protocol, which allows advisors to take some client information when switching firms, according to AdvisorHub. The wirehouse was able to get a restraining order against a broker in Florida late last month, after which the firm he had switched to fired him, the website writes.