Legal
Morgan Stanley Reportedly Sues Wealth Manager Who Joined Rival

The suit sheds light on how some wealth managers are getting tough on managers who defect to rivals in what remains a competitive employment market.
Morgan
Stanley is reportedly suing a former financial advisor who
recently quit to join a competing firm.
In a complaint filed June 11 in the federal court in Atlanta,
Morgan Stanley Smith Barney, the US firm’s retail broker-dealer
subsidiary, alleges that Benjamin F. Joel misappropriated Morgan
Stanley's trade secrets, according to a report by the Atlanta
Business Journal.
Joel, who worked at Morgan Stanley's office until he resigned on
May 24, recently joined RBC Wealth Management. While at Morgan
Stanley, Joel oversaw client assets of about $177 million. The
report added that the man had been with Morgan Stanley since
1987.
"Joel recently resigned his employment with Morgan Stanley, but
not before absconding with numerous forms of documentation
containing Morgan Stanley's confidential and trade secret
information related to its clients," the firm reportedly alleged.
"He has already begun employment with a direct competitor ... and
both before and after his resignation from Morgan Stanley, Joel
wrongfully solicited -- and continues to solicit -- several
Morgan Stanley customers."
As reported here more than a year ago, an
industry-wide “protocol” under which wealth managers agreed
not to sue one another in the event of manager defections has
partly broken down, with a handful of large firms junking it,
claiming that some organizations were misusing the pact. Morgan
Stanley abandoned the protocol in 2017; as did UBS and
Citigroup. Almost 1,700 firms have signed the protocol. The
agreement waives non-solicitation agreements common in the
industry, thereby helping advisors take books of business to
other firms as long as they bring only a limited amount of client
information with them.
In a related court filing, Morgan Stanley financial advisor
Candice G. Smith says: "A large number of Morgan Stanley
customers transferred their assets the first business day,
Tuesday May 28, after Mr Joel's resignation, and several have
followed since”, the publication said, adding that the US firm
wants a court order blocking Joel from using any of its
confidential information or soliciting its clients.