Battle of the brokerages |

Battle of the brokerages

Greg Masse
Post Independent Staff

GLENWOOD SPRINGS – Seven former Morgan Stanley employees “raided” the brokerage’s Glenwood Springs office March 14 and “pirated all of that office’s financial advisors and assistants, along with company records,” Morgan Stanley alleged in a federal court motion filed March 25.

The seven former employees then started up a new Glenwood Springs branch for a competing brokerage firm, Stifel Nicolaus, about one mile away.

Stifel Nicolaus general counsel Tom Prince discounted the motion, insisting the employees were well within their rights in making their move.

“We feel like we’ve complied with all the rules and regulations,” Prince said.

He said Stifel Nicolaus plans to vigorously defend itself and the seven defendants named in the motion against any legal action taken by Morgan Stanley.

As of Tuesday afternoon, Prince said Stifel Nicolaus had not yet filed a countermotion in federal court.

“We’ll be filing our response – if not this afternoon, then tomorrow,” Prince said Tuesday.

Morgan Stanley describes itself as a company specializing in financial services, securities investment management and credit services. Its Glenwood Springs office is located at 201 Centennial St.

Stifel-Nicolaus, a registered broker and investment banking firm established in 1890 and headquartered in St. Louis, Mo., specializes in securities, brokerage, investment banking, trading and investment advice. Its new Glenwood Springs office is located at 118 W. 6th St., at the Springs Center next to the Ramada Inn.

The seven former Morgan Stanley employees – financial advisors Sumner Schachter, Michael McCallum, Daniel “Marc” Gilkerson and Scott Nelson, along with financial advisor assistants Kim Richardson, Darcy Croissant and Elicia Bellmire – tendered their resignations en masse on Friday, March 14.

According to Schachter, the group started up a new branch for Stifel Nicolaus later that same day.

The new Stifel Nicolaus branch is the company’s first on the Western Slope and its fifth in Colorado.

Eleven days later, Morgan Stanley attorneys in Denver filed a motion for preliminary injunctive relief in U.S. District Court in Denver against Stifel Nicolaus and the seven former employees.

In a memorandum in support of that motion, Morgan Stanley alleges when the seven employees made the move to Stifel-Nicolaus, they began “actively soliciting Morgan Stanley’s customers by notifying those customers that Morgan Stanley has closed its office in Glenwood Springs and that Morgan Stanley intends to leave the Glenwood Springs market.”

“There are no plans to close the Glenwood office,” said Morgan Stanley spokeswoman Nancy Delionado.

Morgan Stanley also alleges in the motion that confidential client records and computers loaded with Morgan Stanley-owned software – called “Broker’s Ally” – were taken.

“Morgan Stanley assistant manager Dave Nicholson searched the Glenwood Springs office and found only names of clients, holding pages and other company records of minor significance,” the motion said.

“Nicholson found no other company records at Morgan Stanley’s Glenwood Springs office, specifically including financial plans for Morgan Stanley’s customers and other Morgan Stanley customer information,” the motion added.

“Further, the defendants removed their own computers, specifically the Broker’s Ally programs . Morgan Stanley further believes that the defendants are holding the employment records in order to inhibit Morgan Stanley’s pursuit of litigation against the defendants.”

The motion says when employees start working for Morgan Stanley, they are required to sign an anti-unfair competition agreement. The company’s copies of these agreements with most of the seven former Glenwood Springs employees, however, were lost when the World Trade Center in New York City was destroyed on Sept. 11, 2001, it said.

The unfair competition agreements bar former employees from soliciting Morgan Stanley customers within a 100-mile radius for a period of one year, the motion says.

The only remaining copies of those agreements were taken by the seven former employees, the motion alleges.

“Morgan Stanley believes that agreement is among the employment records in the possession of the defendants,” it said.

Stifel Nicolaus attorney Prince said Morgan Stanley’s court filing is part of a “trend” in the financial services business.

“Whenever anyone leaves, the group they left tends to holler foul,” he said.

Schachter, the most senior of the financial advisors to leave Morgan Stanley’s Glenwood Springs office, declined to comment on the specifics of the court motion because of “unresolved legal issues,” but he said he thinks the move to Stifel-Nicolaus will be a productive one for all involved.

Stifel-Nicolaus “is a full-service brokerage firm that will provide our people with tons of excitement,” Schachter said.

Together, Schachter said he and the others are a team, and as a team they had been considering making the switch to another company for a while, conducting a nationwide search for the right fit.

“We did a far-range search for what we think is the best for our clients,” he said.

Contact Greg Masse: 945-8515, ext. 511

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