Morgan Stanley Files Lawsuit Against $6 Million Team

From the Desk of Jim Eccleston at Eccleston Law LLC:

A $6 million advisor team led by Wade Martin left Morgan Stanley to join RBC Wealth Management-U.S. in October 2020. On January 14, 2021, Morgan Stanley filed a lawsuit against the Martin team, alleging “rampant” client solicitation by the Martin team. The lawsuit is seeking a temporary restraining order while a FINRA arbitration case is pending, AdvisorHub reported. Morgan Stanley alleged that the Martin team violated their legal obligations by retaining client information and proprietary presentations when they left Morgan Stanley.

Morgan Stanley’s lawsuit alleged that Wade Martin sent himself an email prior to leaving Morgan Stanley which included a confidential document regarding structured settlements. The lawsuit further alleged that on the same day the Martin team resigned from Morgan Stanley, the Martin team sent overnight mail to “many and perhaps most” of the clients they serviced at Morgan Stanley.

The lawsuit, filed in federal court in New Jersey, argues that a temporary restraining order is necessary because the Martin team continues to “violate flagrantly their legal commitments.” Morgan Stanley alleged that the Martin team had transitioned $200 million of client assets to RBC. While at Morgan Stanley the Morgan team managed $600 million of client assets.

Until 2017, Morgan Stanley was a member of the Protocol for Broker Recruiting, which was designed to reduce litigation stemming from advisor transitions from one firm to another. Following the firm’s departure from the Protocol, Morgan Stanley began filing lawsuits against advisors who left the firm.

Tags: eccleston, morgan stanley, lawsuit, RBC Wealth Management