Morgan Stanley Wins TRO Against Atlanta Broker
A judge in Atlanta has granted Morgan Stanley’s request to prevent a broker who joined RBC Wealth Management from contacting former customers, but said he can work with people who already signed account transfer forms and with immediate family members.
Morgan Stanley and Joel also agreed to waive a further court hearing at which he could have offered evidence to dispute his former firm’s contention that he took confidential customer-contact data with him in violation of his employment and joint-production contracts.
The case will now proceed to Finra arbitration, where Morgan Stanley is expected to seek damages from the broker and from RBC, according to people familiar with the firm’s plan. The Finra hearing will not be conducted on an expedited basis, according to the stipulated agreement.
Neither Joel nor his lawyer, Adam Katz of Katz Litigation Group in Atlanta, returned requests for comment on their decision to agree to waive a further court hearing. An RBC spokeswoman declined to comment.
“Morgan Stanley is pleased with the court’s decision,” a company spokeswoman wrote in an e-mail.
In its June 11 request for a TRO and preliminary injunction, Morgan Stanley said that a Rolodex used by Joel as his primary source of customer contact information was missing from his former office in Atlanta. The broker managed about $177 million of customer assets through a joint production agreement. His “almost entirely paper-based” practice did not rely on electronic customer relationship management tools or calendars, the firm’s court filing said.
Morgan Stanley accused Joel of contacting former customers before and after he left the broker-dealer. The stipulated TRO restricts solicitation of all customers he obtained through the 2015 joint production agreement.
Joel worked at Morgan Stanley and predecessor firms Smith Barney and Lehman Brothers since 1987, according to his BrokerCheck record, which includes no customer complaints or other disclosures.
Morgan Stanley has had mixed success in obtaining restraints against fleeing brokers since leaving the Protocol for Broker Recruiting in late 2017. Employment lawyers who represent brokers and outside recruiters said the lawsuits have had a deterrent effect on the firm’s more than 15,000 advisors, but also said that customer contacts are possible if information is publicly available.
Morgan Stanley was represented in the court case by the Atlanta firm of Ford & Harrison and by Michael Taaffe and Michael Bressan of Shumaker, Loop & Kendrick in Sarasota, Florida.