UBS Sues Houston Broker who Joined Morgan Stanley, Cites Inherited Accounts
UBS Wealth Management USA has sued a high-profile Texas broker who moved last month to Morgan Stanley, seeking to enjoin her from calling former clients in alleged violation of numerous employment and account inheritance agreements.
When UBS and Morgan Stanley exited the Protocol for Broker Recruiting at the end of 2017 they were expected to aggressively pursue advisors who took client information with them, but UBS has prosecuted few who left. The lawsuit, however, zeroes in on an alleged breach of contract violation involving inherited accounts from retired broker Karen Hughes that UBS alleges contributed to much of VanMeurs’ success.
“UBS transitioned Ms. Hughes’s entire book of business…,instantly giving [Van Meurs] a steady income stream from current clients,” the complaint says.”This was a substantial windfall to Van Meurs–the Hughes book she inherited was in excess of $180,000,000.”
Hughes, who as of last week was still listed as a team member on Van Meurs’ UBS website, left UBS in 2019 after three decades, according to her BrokerCheck history.
VanMeurs, who started at UBS as a client associate in 2007 and who moved on May 22 with another advisor and three client associates, did not return a request for comment.
UBS accused her of taking customer contact information and contacting her former clients by cell phone and through her associates in violation of a “development agreement” signed when she entered its advisor training program in 2011, a “receiving agreement” involving the Hughes book and a 2018 agreement involving other reassigned accounts. The agreements variously prohibit her from soliciting accounts for six months to a year after leaving, according to the complaint.
“Given the speed at which UBS customers…have contacted UBS to transfer accounts to Morgan Stanley, there can be little doubt that she used protected UBS customer contact information on her cell phone to initiate contact with UBS customers,” UBS wrote.
Brokerage firms seeking to handcuff advisors in the crucial first few weeks after leaving often say they have heard from clients annoyed about solicitations. The UBS complaint does not address that issue.
UBS asked the court to temporarily enjoin VanMeurs’ from further solicitation and to return any confidential information she may have.
It also has filed a parallel claim for damages and a permanent injunction against the broker with Finra arbitration, according to the complaint.
The lawsuit does not name Morgan Stanley or other members of VanMeurs’ team as defendants.
A spokeswoman for Morgan Stanley declined to comment. Morgan Stanley, unlike UBS, has filed more than a dozen court motions for injunctions and temporary restraining orders against departing brokers since it left the Protocol.