Morgan Stanley alleges Gary Burwick and Marc Engelman removed client data and used it to solicit their former clients at the wirehouse after they left for Wells Fargo on Sept. 20, AdvisorHub writes, citing a complaint filed Friday in the U.S. District Court in the Southern District of Florida.
The pair oversaw around $500 million in client accounts that generated “hundreds of thousands of dollars in profits for Morgan Stanley,” the company says in the suit, according to the industry news website.
Morgan Stanley is seeking a TRO, a preliminary injunction and the return of the client information, AdvisorHub writes.
The wirehouse is also seeking damages in arbitration in a parallel claim, according to the website.
Burwick and a Wells Fargo spokeswoman declined comment to AdvisorHub.
In late 2017, Morgan Stanley withdrew from the Protocol for Broker Recruiting, the industry accord that lets departing advisors take some client data with them without the threat of lawsuits.
Since then, the wirehouse has filed more than a dozen TRO claims against its former brokers.
In most cases, Morgan Stanley has succeeded in obtaining them, as FA-IQ previously reported.
But the “vast majority” of brokers leaving Morgan Stanley never face TRO claims from the firm, a lawyer who has represented both wirehouses and departing brokers in such cases previously told FA-IQ.
Last week, Judge Edwin Torres scheduled a hearing on Morgan Stanley’s claim against Burwick and Engelman for Oct. 3 and said he wanted to give the advisors the opportunity to respond to the firm’s claims, according to AdvisorHub.
James Heavey, a lawyer with New York-based Barton LLP, who often represents brokers in employment cases, tells the website the order suggests that judges are more willing to hear the broker's side of the story.
“I’m seeing it more and more in these commercial disputes,” Heavey, who was not involved in this case, tells AdvisorHub. “It shows that the judge is being mindful of both sides and attempting to be equitable.”