Another Former Morgan Stanley Broker Loses New Job After TRO
Two of the three brokers who agreed to a temporary restraining order after leaving Morgan Stanley in the past three months have lost their new jobs, a potential sign of the long-reaching effects that firms can orchestrate when trying to retain clients.
In the most recent case, Steven Glazer, whose December departure from Morgan Stanley’s office in Deerfield, Ill. for a small registered investment advisory firm was almost immediately followed with a TRO order, is no longer working at the RIA.
A person answering the phone at Asset Management Group, the RIA, confirmed that Glazer has left. Glenn Movish, AMG’s founder who had earlier expressed strong support for his new hire, did not immediately respond to a request for comment.
Glazer, reached at a personal phone number, declined to comment. He is not currently registered with a broker-dealer, according to his BrokerCheck history.
Brokers and recruiters have been closely following the fate of advisors who have left Morgan Stanley and UBS Financial Services since the broker-dealer giants dropped out of the Protocol for Broker Recruiting late last year. The Protocol permits brokers to move to signatory firms with rudimentary client contact information without fear that their former firms will sue them for using confidential information.
Glazer is the second former Morgan Stanley broker to have lost his new job. Doron Rachman, who left the firm’s Aventura, Florida, branch in November and drew a TRO and arbitration filing worked for only a few days at a wealth management unit of Bank Leumi before it terminated his employment.
John Fitzgerald, a third broker who was pursued by Morgan Stanley since its “Prexit” decision, continues to work as a contractor in New Jersey with independent broker-dealer Commonwealth Financial, but has agreed to terms of a court-ordered TRO.
While the three advisors who have left Morgan Stanley are believed to have been relatively inexperienced producers, their fates illustrate the power of big firms to wield wallets to protect their client bases irrespective of book size or competing firm. Indeed, Morgan Stanley indicated that one reason it left the pact was that some of the more than 1,500 firms that are now signatories were gaming the Protocol, implying that smaller firms were feeding off their bigger rivals.
“For two advisors to step out of the business is telling,” said Tom Lewis, a lawyer with Stevens & Lee in Princeton, N.J. who often represents brokers. “If they were not successful in bringing on their book of business, it’s highly unlikely that the firm they joined would want to continue on with the expense.”
Movish in an earlier interview with AdvisorHub characterized his firm with just over $50 million of assets under management as a “minnow” that Morgan Stanley was attacking to send a message to other small firms seeking to hire its advisors.
Only one UBS broker is known to have left the firm since it exited the Protocol last month, and he has not to date been sued by the broker-dealer. The broker took a post with a Raymond James affiliate in California, which has more liberal employee-rights laws than most states, lawyers and headhunters have said.
To be sure, the brokers who have been sidelined by restraining orders and corresponding arbitration complaints appear to have been careless or heedless about sticking to the letter of their employment contracts and of Protocol rules in taking customer lists and initiating clients. As a result, industry observers said they are still waiting for a true test case.
Meantime, the news about the former Morgan Stanley brokers’ troubles will likely have the chilling effect that the firm wants to send.
“When there’s news about litigation or a problem, everybody becomes a little more hysterical,” Lewis said.