JPMorgan Chase & Co. (NYSE: JPM) has filed suit against a former financial adviser who left to work for Morgan Stanley (NYSE: MS) Smith Barney.
The adviser, Michael Lupia, has already transferred more than $30 million worth of client assets to his new company, according to documents filed in the New York Supreme Court on Wednesday. JPMorgan Chase & Co. (NYSE: JPM) accuses Lupia of breaching his employment contract and making use of confidential information about the company to make contact with former clients and transfer their accounts.
The suit said that Lupia sent letters to more than 125 clients offering reduced fees if they moved their accounts over to Morgan Stanley (NYSE: MS). Lupia, who joined Morgan Stanley’s Great Neck, NY-based branch on June 18, oversaw $217 million in client assets at JPMorgan, the documents said. JPMorgan Chase & Co. (NYSE: JPM) also accuses Morgan Stanley (NYSE: MS) Smith Barney of aiding Lupia in breaching his obligations.
JPMorgan Chase & Co. (NYSE: JPM) is seeking an injunction against Lupia and Morgan Stanley (NYSE: MS) to stop them from seeking any more of its clients. The firm also wants Lupia to return information that he took from the bank.
Under the Protocol for Broker Recruiting, advisers are allowed to take basic client contact information when they change firms without fear of being sued. Morgan Stanley (NYSE: MS) is a signatory of the protocol, however, JPMorgan Chase & Co. (NYSE: JPM) is not, which means it is free to sue advisers and firms in these types of situations, said Tom Lewis, an attorney with Princeton, New Jersey-based Stark & Stark to ABC.
