TRO Reversal: Morgan Stanley Loses Bid To Extend Punitive Measure Against Broker Who Defected To UBS
It seems that Morgan Stanley’s policy of zero discrimination when it comes to handing out TRO’s took a legal hit. Specifically, a legal reversal, as a judge could not find ‘irreparable harm’ as a fleeing broker requested a TRO be lifted.
“Judge Ann Aiken of the U.S. District Court in the District of Oregon on Wednesday denied Morgan Stanley’s request to extend a temporary restraining order against David J. Sayler, writing that the firm failed to prove it would suffer ‘irreparable harm’ from his using allegedly proprietary data in violation of his employment contracts.”
“If Sayler is found to have violated the 2017 and 2019 Agreements by soliciting covered client accounts, the loss to Morgan Stanley is likely more financial than reputational,” Aiken wrote. “Such harms can be redressed by damages…and are not, therefore, irreparable.”
“Courts typically continue TROs as preliminary injunctions that remain in effect until a determination by a Finra arbitration panel, said Thomas B. Lewis, a securities employment lawyer at Stevens & Lee in Princeton, N.J.”
“The decision appears to be the first in which a judge reversed his or her order in more than a dozen cases that Morgan Stanley has brought since leaving the Protocol for Broker Recruiting in November 2017.”
Now, as the above reads, this doesn’t happen very often. But it certainly gives advisors that leave Morgan Stanley a small precedent and a fighting chance to deny ‘irreparable harm’. That is something for advisor solicitors to hang their legal hats on.
What it won’t do it stop Morgan Stanley from passing out TRO’s for Halloween, you can be assured of that fact. But in this particular case, score one for the little guy.