Corporate & Securities Law

Morgan Stanley has filed a lawsuit against 5 of its brokers who left the firm to join HighTower Advisors.  HighTower denies any liability, calling the legal action a failed intimidation tactic. The suit claims that the brokers told clients of their impending move while still employed.  The suit claims that the brokers took client account information.

What makes the case especially interesting is the fact that both firms are signatories to the Protocol for Broker Recruiting.  But Morgan Stanley claims that the Protocol does not allow the activities that the brokers engaged in.  By last summer, 300 firms had signed on and it has become the industry standard for what is permissible as brokers transition from firm to firm. 

The Protocol has several traps for the unwary transitioning broker.  SNSFE attorneys work with brokers to ensure that their transitions go smoothly.

Source:  Financial Advisor magazine