Morgan Stanley Seeks to Stop Two Departing Advisors from Transferring Inherited Accounts

Posted on May 9th, 2022 at 2:59 PM
Morgan Stanley Seeks to Stop Two Departing Advisors from Transferring Inherited Accounts

From the Desk of Jim Eccleston at Eccleston Law:

Morgan Stanley is seeking a temporary restraining order (TRO) in an effort to block two of its former New-Jersey based advisors from soliciting clients whom they inherited via the firm’s Former Advisor Program (FAP). 

Joseph Hutchinson and Robert Gibbs allegedly violated their employment agreements by misappropriating confidential client information because of their success in transitioning clients inherited from a retired advisor, according to Morgan Stanley. Hutchinson and Gibbs, who recently joined RiversEdge Wealth partners, have transferred nearly $20 million of the $175 million book they inherited from the former advisor, Leo Russomanno. According to Morgan Stanley, Hutchinson and Gibbs agreed to a one-year solicitation ban in the event they were to depart the firm. 

Morgan Stanley sent demand letters to each advisor after their departure on April 19 prior to filing its lawsuit, but each denied misappropriating the firm’s confidential client information or soliciting the clients. According to the complaint, the $175 million in assets constituted nearly 85% of the advisors’ total client book. Hutchinson and Gibbs have been “depriving” Russomanno, who retired in 2019, of his retirement income, according to Morgan Stanley. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 

Tags: eccleston law, morgan stanley, tro

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