Morgan Stanley Files Suit Against Oregon Advisor Over Inherited Account Issue
From the Desk of Jim Eccleston at Eccleston Law:
After firing Robert Sevcik in July, Morgan Stanley has filed for a temporary restraining order (TRO) against the Oregon-based advisor as part of the firm’s investigation into the miscoding of production numbers on inherited accounts. Morgan Stanley alleges that Sevcik is attempting to solicit former clients to join him at his new firm, D.A. Davidson, which violates an agreement Sevcik signed in 2017 with a retired advisor, James Maddux.
Sevcik was fired in July purportedly after taking credit for trades that were supposed to be shared with Maddux. Sevcik managed nearly $160 million in assets that he had inherited through the Former Advisor Program (“FAP”) and the assets generated at least $1 million in annual revenue. According to the complaint, Sevcik has been contacting former clients and told at least one that he was the “‘fall guy’ in a regulatory investigation involving Morgan Stanley.”
Morgan Stanley alleges that Sevcik violated Financial Industry Regulatory Authority (FINRA) rules by making misleading statements to clients. “Morgan Stanley believes that Defendant’s contacts with clients, including his misleading statements, will only grow exponentially, in an effort to solicit business away from Morgan Stanley and further deprive Mr. Maddux of his retirement income”, the firm alleged in its complaint. Additionally, Morgan Stanley filed a claim with FINRA for a permanent injunction and damages. According to the firm, Morgan Stanley advisors are restricted by FAP from soliciting clients for at least one year or for the duration of the five-year transition period.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters, including Morgan Stanley advisors in FAP.
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