Morgan Stanley filed suit against an advisor who allegedly altered his clients’ telephone numbers in the company’s computer database on the afternoon before he abruptly resigned.
Morgan Stanley Smith Barney LLC is asking for a temporary injunction barring the advisor from soliciting the clients in his new position with Raymond James Financial Services Inc. in Mystic, Conn.
Denis O’Brien, the advisor in the case, worked for Morgan Stanley in its Mystic, Conn., office for nine years before he resigned without giving notice on Oct. 25. On the afternoon of his resignation, he altered 206 telephone numbers belonging to 156 accounts in the Morgan Stanley computer database, the suit says.
The clients were reassigned to four other financial advisors in the Mystic office, but the advisors were unable to reach the clients by telephone, according to the suit filed in Federal District Court in Connecticut on Oct. 31.
O’Brien left a printed list of the correct numbers with the company, but it was several days before it was realized the computer list and the printed list did not match. O’Brien also took a correct list with him to use for solicitation purposes, the suit says.
In addition to the temporary injunction barring O’Brien from trying to take clients with him to his new position, the suit asks for the return of all materials O’Brien took from the office.
Morgan Stanley also has filed an arbitration request against O’Brien before the Finra Dispute Resolution unit. The arbitration action is expected to be held on an expedited schedule as soon as the court acts.
O’Brien’s actions violate the employee agreement he signed when he joined Morgan Stanley, which said he would not take any client information with him, the lawsuit says. The agreement also stipulated that he would not solicit any Morgan Stanley clients that he served for one year after leaving, the suit says.
Morgan Stanley maintains it will be irreparably harmed if O’Brien is not prohibited from using the information he took with him. The suit charges O’Brien with breach of fiduciary duty, breach of contract, fraud and other violations of the Connecticut Unfair Trade Practices Act.
An attorney for O’Brien declined to comment on the suit.