An irreverent Wall Street Blog
by Bill Singer
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Morgan Stanley Wins Unfair Competition And Raiding Case Against Robert W. Baird
Written: November 27, 2012

A picture taken on February 8, 2011 in Rennes,...

In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in March 2010, Claimant Morgan Stanley Smith Barney asserted

Count I: unfair competition/raiding

Count II: aiding and abetting a breach of fiduciary duty

Count III: misappropriation of confidential information

Count IV: tortious interference with advantageous business relationships and contracts; and,

Count V: breach of promissory note against Respondent Paul McWane

The causes of action relate to Respondent Baird’s recruitment and employment of several of Claimant’s Lynchburg, VA, branch employees and to Respondent McWane’s alleged failure to make repayment of the balance of a Promissory Note dated February 12, 2009 (“Note”). In the Matter of the FINRA Arbitration Between Morgan Stanley Smith Barney, LLC, Claimant, vs. Robert W. Baird & Co. Incorporated and Paul McWane, Respondents (FINRA Arbitration 10-01187, November 21, 2012).

Claimant sought compensatory damages, punitive damages, attorneys’ fees, and costs against Respondent Baird. Additionally, Claimant sought the return fof all documents relating to its Lynchburg office clients obtained by Respondent Baird. As to Respondent McWane, Claimant sought $107,448.90 in compensatory damages, plus interest, costs and attorneys’ fees as provided in the Note.

Respondent Baird generally denied the allegations and asserted various affirmative defenses.

One Down

Claimant voluntarily dismissed Count V ofStatement of Claim, and, accordingly, Respondent McWane was dismissed with prejudice.


The FINRA Arbitration Panel found Respondent Baird liable and ordered the firm to pay to Claimant Morgan Stanley Smith Barney $700,000.00 compensatory damages plus 6% per annum interest from December 1, 2012 until the Award is paid.

Bill Singer‘s Comment

My, my, my!  How angered Morgan Stanley Smith Barney must have been with the audacity of  Robert Baird.  I mean, you know, an august firm of Morgan Stanley Smith Barney’s stature would never, ever stoop to such unsavory tactics as set forth in the Statement of Claim. Of course, after some 75 years, the name Smith Barney has been designated for the scrap heap but, hey, it was all a bit cumbersome anyway.

Now as for this Baird case, lemme see . . . when was it . . . oh, yeah, in September 2012, just around the time when the Morgan Stanley folks pulled the plug on the Smith Barney name, “Street Sweeper” reported about another FINRA Arbitration raiding case: Morgan Stanley Smith Barney Eviscerated In Fidelity Unfair Competition Case.  In a FINRA ArbitrationStatement of Claim filed in October 2011, Claimant Fidelity detailed its dispute with Respondent Morgan Stanley Smith Barney (and another individual respondent) in connection with the alleged misappropriation of Fidelity’s confidential customer information, which was then purportedly used to unfairly compete with Claimant by soliciting its customers. After awarding to Claimant Fidelity about $81,000 in compensatory damages — the arbitrators tacked on punitive damages, attorneys’ fees, and costs, to the tune of an award of nearly $700,000!  Amazing how that amount is nearly the same as the one awarded to Morgan Stanley Smith Barney in the case featured in this column.  Will coincidences never cease?

To better explain the rationale of their award, the arbitrators in the Fidelity case drafted a compelling, 25-page “Arbitrators’ Report,” which included this nugget:

The conduct engaged in by MSSB in this case represents an unfair method of competition in the securities industry precisely because it attempted, either explicitly, implicitly or through nefarious and surreptitious means, to impose upon Fidelity, a non-Protocol firm, rules of commerce by which it never agreed to be bound. This isn’t fair competition; it’s an illicit and improper rigging of the rules — a stacking of the deck — to favor one competitor over another.

Wall Street‘s landscape has always been filled with contentious disputes between and among the likes of Merrill Lynch, JP Morgan, UBSMorgan Stanley,  Wells Fargo, and so many other names no longer with us, merged into the ranks of competitors, or still hanging in there. Firms come and go but among the constants are the impetus to cannibalize business; to engage in hardball tactics to jam up those who get in your way; and to pull out all the stops, legal or otherwise, compliant or otherwise, ethical or otherwise.

It’s a tough Street. Always has been. Always will be. Not the pavement for the faint of heart.

READ “Street Sweeper” columns on raiding, unfair competition, and the Protocol:

Also, READ Wall Street Recruiter Craig Enderlin’s 2013 Job Forecast


Previous Entries
January 31, 2015
Elderly Sugar Daddy, His Young Thing, And His Banker / BrokerGood intentions seem to have exploded in a banker / broker's  face, when he came to ... Read On
January 30, 2015
Good intentions seem to have exploded in a banker / broker's  face, when he came to the aid of an elderly customer, who fell under the sway of a ... Read On
January 29, 2015
There are lots of bad guys out there, and on Wall Street, brokerage firms need to protect not only their customers but also themselves from some of th... Read On
January 28, 2015
Another day and another email disaster at another major FINRA member firm. In the end, however, the customer is made a whole -- but the registered per... Read On
January 27, 2015
Seems to me that Wall Street is quite a bit like weather forecasts. Take today, for example -- in NYC, we were supposed to awake to Snowmageddon with ... Read On
January 26, 2015
Imagine that you're broke and can't afford a fabulous but high-priced regulatory lawyer like me and you need to submit a brief in response to some abs... Read On
January 24, 2015
Chinese Pharma Private Securities TransactionsAs the economy recovers from the Great Recession, a number of regulatory violations that had been some... Read On Job Search

Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Morgan Keegan Arbitration Counterclaim Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC Ponzi Affinity Fraud Wachovia Raymond James Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX FBI Banc of America Pro Se PCAOB Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax Email Netschi Moore Whistleblower Street Sweeper Countrywide Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers SIPC IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Thain Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 Eligibility RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Rule 3050 Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon CGMI Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Expense Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital Due Process God HSBC Private Placements Eric Stein Wire Fraud FINOP CCO Audit Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Series 7 Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education Cheating OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Investor Alert Judgment Bank Fraud Deceased Bill Singer BrokeAndBroker TSSB Mary Jo White Trustee Motion To Dismiss Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Self Regulation Short Sale Compromise Website TRO Supervision Vacatur SDNY Rule 12206 BrokeAndBroker Bill Singer Piwowar Stifel Rule 1122 Article V signature Confidential Inside Information VA Regulation SP Customer Rule 3270 Rule 3240 Annual Compliance Questionnaire OWB 2Cir Stockbrokers Cybercrime Loans Altered Records
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+