Morgan Stanley Wins TRO Against Texas Broker Who Jumped to RayJay
A former Morgan Stanley broker who allegedly posted a video alerting former clients about his move to Raymond James over the Memorial Day weekend has been ordered by a county judge in Texas to stop his solicitations and to return client-contact information to his former firm.
The temporary restraining order was issued by Dallas County District Court Judge Sheryl McFarlin on the same day that Morgan Stanley lost a similar attempt to block a California broker who jumped to Wells Fargo Advisors from contacting former clients.
Pearson reportedly was producing $1.7 million at Morgan Stanley.
In rushing to court with its TRO request on Monday, Morgan Stanley cited the video that the broker had posted on his Raymond James website, saying it is a “direct pitch” to his former customers and that he prepared it on a visit to his prospective new employer while he was still working at his former firm. The video is no longer posted on his website.
Reached at the Raymond James employee channel office in Dallas, Pearson declined to comment.
“I want to apologize for the shock that this may be to some of you guys because you know how I communicate,” Pearson said in the video to his former clients, according to Morgan Stanley’s court filing. “[I]f we haven’t spoken yet, I’ll be calling each of you over the next few days and help you transition your accounts as quickly as possible to Raymond James.”
The video concept has been used by other newly arrived Raymond James brokers as an efficient, if impersonal, way to quickly reach out to former clients. Spokespeople at Raymond James did not return a request for comment on Monday’s ruling or on Morgan Stanley’s allegations that the firm helped Pearson with the video.
As a result of the ruling, Morgan Stanley won expedited consideration of its parallel filing of an arbitration complaint seeking a permanent injunction against Pearson with the Financial Industry Regulatory Authority. Under the regulator’s rules, once a temporary injunction order is issued a hearing on a permanent injunction must begin within 15 days.
Pearson first registered as a rep in 1995 with Merrill Lynch, where he remained for five-and-a-half years before joining UBS in Dallas for a seven-year stint, according to his BrokerCheck history. He joined Morgan Stanley from UBS in December 2009.