Morgan Stanley is suing a former employee and accusing him of breaking his non-solicitation contract when he left to work at Raymond James.
The wirehouse filed its suit against Las Vegas-based advisor Nicholas Takahashi in Nevada federal court this week, seeking a temporary restraining order to stop him from allegedly enticing clients at his former firm to follow him to Raymond James.
So far, Morgan Stanley argues Takahashi has solicited clients with hundreds of millions in assets representing more than $1 million in gross annual revenue for the wirehouse.
FINRA records show Takahashi entered the industry in 2008 at Wachovia before Wells Fargo acquired it and then joined Morgan Stanley in 2013. Takahashi signed an agreement not to disclose “confidential” client information to competitors and would not solicit clients from Morgan Stanley for a year after he quit or was fired, according to the wirehouse.
On May 8, Takahashi and his $1.3 billion team joined Raymond James from Morgan Stanley. The team included Takahashi (who joined Raymond James as a managing director), James Zapotocky, Joshua Yocam, Luka Vasiljevic, Michael Ortega, Stephen Ellignsen and Sean Tsaconas.
Morgan Stanley then contacted Takahashi, urging him to adhere to his non-solicitation clause and return confidential client information, but the advisor denied retaining such information.
By early September, Morgan Stanley claimed it learned that Takahashi and several team members contacted clients of Steve Kleinertz, another advisor for the wirehouse. According to the suit, Kleinertz and Takahashi had a “joint production agreement” encompassing all of Kleinertz’s clients, a setup encouraged by Morgan Stanley as a backup succession plan for unexpected life events.
However, according to Morgan Stanley, Takahashi (and his team) hadn’t set up any “client connectivity or joint servicing” with Kleinertz, with each advisor managing their clients without any service crossover. To Morgan Stanley, the move was “primarily strategic” to keep succession options on the table.
“Thus, it is inconceivable the (Takahashi) and the Takahashi team members would have knowledge of the clients serviced by Mr. Kleinertz and their highly sensitive information without having accessed confidential client lists and records that were not related to their job responsibilities for Morgan Stanley, and unlawfully have taken such information to their new firm,” the complaint read.
Morgan Stanley alleged that Takahashi’s team has contacted “many, if not all” of Kleinertz’s clients, with some of them surprised that the inquiring team knew details of their account history despite never having crossed paths.
The wirehouse alleged that Tsaconas (at Takahashi’s direction) told clients Kleinertz was “no longer at Morgan Stanley” and their accounts were “no longer being actively managed.” The wirehouse called these claims false “fear tactics,” as Kleinertz was still with the firm.
Morgan Stanley claimed it had outlined the allegations in a September letter to Takahashi’s counsel. The following month, the team denied the accusations, claiming Takahashi or his team had “personally interacted” with Kleinertz’s clients. According to the wirehouse, this isn’t true, and they claim Takahashi’s team continues to solicit Kleinertz’s client base.
Attorneys for Takahashi did not return a request for comment prior to publication.