To ensure fair competition and client privacy, many financial services firms sign an agreement known as the

Question:

To ensure fair competition and client privacy, many financial services firms sign an agreement known as the Protocol for Broker Recruiting. It outlined theprocedures that all member firms, and their employees, had to follow when hiring financial advisors from any other signatory firm. The Protocol required departing advisors,acting in good faith, to give their old firm a list of their clients’ basic contact information. Moreover, the advisor’s new firm was required to limit the use of the listed information. The two firms in dispute in this case –Morgan Stanley and Raymond James – had both signed the Protocol.

Denis O’Brien was a financial advisor at Morgan Stanley. In his employment agreement, he promised not to solicit any of his Morgan Stanley customers for a year after his departure. Years later, O’Brien decided to work for Raymond James. The day before he resigned, O’Brien used the Morgan Stanley electronic database to print out a list of his clients and their contact information. Once he had the correct list, he went back into the database and altered 206 client telephone number. O’Brien gave Morgan Stanley his resignation along with a copy of the original, correct, printed list. After experiencing difficulty reaching O’Brien’s clients, Morgan Stanley discovered that he had corrupted the database. During this delay, O’Brien lured 15 clients to Raymond James.

Morgan Stanley sued O’Brien arguing that he acted in bad faith and breached his employment agreement by soliciting his former clients. The firm sought an injunction directing him to return the customer information and prohibiting him from soliciting Morgan Stanley customers.

Questions:

1. Was Morgan Stanley entitled to an injunction?

2. What did O’Brien do wrong?

3. Did he know that what he was doing was prohibited by the Protocol?

4. Why did he give Morgan Stanley a list of his current clients with the correct telephone numbers?

5. Was Morgan Stanley injured by O’Brien’s conduct?

6. What kinds of harm did they suffer or would they likely suffer in the future?

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...

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