Newsletter Signup

Search Our Blog

San Diego Securities Lawyers: First Morgan, Now UBS Jumps From The Broker Protocol Ship

By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 28, 2017.

Erwin J. Shustak, Esq.
619.696.9500 ext. 109
[email protected] 

Several weeks ago, Morgan Stanley became the first major wire house to exit the Broker Protocol that Morgan signed back in 2006.  Since exiting the Protocol, Morgan already has sought, and obtained, a Temporary Restraining Order from a state court judge preventing that departed broker- who joined Morgan when Morgan still was an active member of the Broker Protocol.  Following Morgan’s lead, UBS, one of the initial three signers of the Broker Protocol back in 2004, has announced it also will leave the Broker Protocol by the first of December.

In the first Morgan post-Protocol case, Morgan obviously wanted to send a very strong message to its remaining brokers that it will not tolerate- and will actively and aggressively move to protect- the taking of what is now non-Protocol information from the firm.

The restrained former Morgan broker- Doron Rachman-  joined a firm that is not a member of the Broker Protocol for Broker Recruiting just two weeks after Morgan exited the Broker Protocol after eleven years.  Rachman had been with one of Morgan’s Miami-Dade offices.  The case appears to be the first effort by Morgan Stanley to put teeth behind its warning to brokers earlier this month that it would enforce the standard, one-year non-solicitation clause contained in most Morgan employment and other agreements.

According to a court affidavit submitted by Rachman’s former complex manager, Rachman allegedly printed out a 14-page list of names, cellphone numbers and e-mail addresses of clients five calendar days before he “abruptly” resigned and sent another list of 200 clients and prospects to his personal e-mail a day before leaving. Those efforts and phone conversations with customers about his alleged plans violated firm policies and procedures because the data was confidential and owned by Morgan Stanley, according to the affidavit.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. We represent many broker-dealers, registered representatives, investment advisors, investors and businesses. For more information, or if you or your company require counsel in these areas, contact us today for a confidential, complimentary consultation.

Share This Article linkedin