Morgan Stanley is seeking a temporary restraining order to stop one of its former advisors from luring away clients who were assigned to him a few days before he left the firm.

Corbin Hoffner was given the clients of a retired colleague, left Morgan Stanley two days later for a firm affiliated with Raymond James and is now trying to steal the clients for his new book of business, the investment bank alleges in a court complaint.

At stake are an unknown number of clients formerly served by Samuel “Greg” Seaton, who retired August 27. According to the  complaint, those clients represent $90 million in AUM and $600,000 a year in revenues. As a retired advisor, Seaton is due trailing revenue for the next five years, as long as those assets stay with Morgan Stanley, according to the court filing.

Morgan Stanley filed its request for a restraining order Monday in U.S. District Court for the Southern District of Florida, and accused Hoffner of breach of contract, breach of the duty of loyalty and unfair competition. It has also filed a complaint against Hoffner with Finra.

A receptionist answering a call at The Grugg Group in Sebring, Fla., Hoffner’s new office, said he would have no comment on the lawsuit.

Hoffner worked with Seaton in Sebring, joining Morgan Stanley in 2020 as his first job in the financial industry, according to BrokerCheck. He was assigned to Seaton’s team in 2021. Seaton began his career in 1991 at Merrill Lynch before joining Morgan Stanley in  2012.

According to the complaint, the two serviced the same clients, with Seaton in the lead role, earning 90% of the commissions. 

When Seaton retired, he sent out an August 27 client letter explaining his retirement and emphasizing that he had full faith in Hoffner’s abilities to continue to serve those clients’ needs, the complaint said.

Two days later, according to the complaint, Hoffner jumped ship to join Raymond James-affiliated The Grubb Group, an advisory launched that same day by two other former Morgan Stanley advisors, Dale Grubb and Matthew Grubb. In addition, Joella Libero, who was Seaton’s assistant, also  left the Morgan Stanley office to join The Grubb Group.

“Hoffner then immediately embarked on an aggressive campaign to solicit the Morgan Stanley clients developed and/or previously serviced by Mr. Seaton,” the complaint said. “Hoffner directly asked many of these clients to move their accounts to Raymond James and has invited one or more clients to meet with him at the Raymond James office.”

“Hoffner has gone so far as to tell clients that Morgan Stanley’s Sebring office is ‘closing,’” the complaint said.

Morgan Stanley alleged that Hoffner has not only harmed its business, but also jeapordized Seaton's retirement revenue stream. In addition, the firm alleged that Hoffner destroyed the files for many of the clients he and Seaton serviced.

Morgan Stanley said in its complaint that a restraining order would expedite its Finra case against Hoffner. It normally takes a year to get such cases before a Finra panel, but a restraining order means a panel would be assembled within 15 days.

 

 

 

 

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