$7-Million Morgan Stanley Trio Ousted over Passwords Joins Stifel
Leaders of a large Morgan Stanley team in Cincinnati who were forced out last week for logging into their customers’ retirement accounts at other firms have landed quickly at a rival firm.
Todd Haacke, Todd A. Hicks and Jeffrey Scheper—whose Todd Group produced around $7 million in annual revenue, according to a reliable source—joined Stifel Financial Group’s Stifel, Nicolaus on Friday, one day after they voluntarily resigned while “under internal review for advising clients on retirement accounts held away from the firm,” according to their BrokerCheck records.
Their departure illustrates the sensitivity of firms to privacy regulations and laws, but also shows that some firms are less rigid if brokers provide convincing context for their activity. The Todd Group brokers had received outside account access credentials with the permission of their clients, according to a source at St. Louis-based Stifel, who spoke on condition of anonymity.
Morgan Stanley, for its part, put at least two of the advisers on leave of absence when it got wind of their activities.
“We are writing to inform you about recent personnel changes affecting the management of your Morgan Stanley account and to provide an important reminder about maintaining the security about your account information, both at Morgan Stanley and other financial institutions,” Ohio Valley Complex Manager Rusty Clark wrote in a January 3 letter to a client reviewed by AdvisorHub that referred them to other advisors and said that Haacke and Hicks were on leave.
“Your user name and password for access to any online accounts…should never be shared with anyone else, including your financial advisors.”
While large and small firms have long urged advisors to track and attract outside customer assets, they are also sensitive to the Securities and Exchange Commission’s Regulation S-P and Finra enforcement of violations of the privacy rule.
Haacke, who had spent his 24-year career as a broker with Morgan Stanley and its Smith Barney predecessor, declined to comment. Hicks and Scheper, who similarly worked at both firms, did not respond to requests for comment.
A Morgan Stanley spokeswoman declined comment.
A Stifel spokesman confirmed the hires, saying that their former team had been managing around $800 million of client assets at Morgan Stanley. He declined to comment on the held-away account allegations.
In the letter to their clients, Morgan Stanley’s Clark referred them to the team’s fourth advisor, William “Chip” Wagner, or to three business and risk managers at the branch and Cincinnati-area complex.
“The Firm recognizes the challenges and complexities that individuals often face in managing their wealth and planning for retirement,” the complex manager wrote. He also urged them to create new passwords and keep them confidential if they had shared them with the brokers.
Haacke joined Smith Barney in July 2002 at the start of his brokerage career, according to BrokerCheck, and had not had a mark on his record prior to his January 10 “separation” notice since mid-2003.
Hicks spent the first three-and-a-half years of his career at Hibbard Brown, Westfield Financial and H.J. Meyers—each of which have been expelled by regulators—prior to joining Smith Barney in May 1995, according to his BrokerCheck record. Scheper began his 11-year registered broker career at Smith Barney in 2007. Neither have reported disclosures, aside from their January 10 dismissals.