November 1, 2013 / 8:44 PM / 5 years ago

Morgan Stanley sues former adviser, claims he falsified records

NEW YORK (Reuters) - Morgan Stanley’s (MS.N) wealth management division sued former financial adviser Denis O’Brien on Thursday, claiming that he falsified 206 client telephone numbers just before leaving the firm.

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013. REUTERS/Mike Blake

According to the complaint, O’Brien changed the numbers for 156 client accounts on the firm’s computer systems on the afternoon of his sudden resignation on October 25, while taking his clients’ contact list to solicit them at his new job.

O’Brien, who registered with rival brokerage Raymond James Financial (RJF.N) on the same day, changed many of the phone numbers by just a single digit, preventing Morgan Stanley financial advisers from promptly reaching his clients after he left, the complaint alleged.

O’Brien could not be reached for comment.

O’Brien had worked at Morgan Stanley’s Mystic, Connecticut since August 2004 before joining Raymond James Financial’s office, also in Mystic.

O’Brien notified Morgan Stanley that he was taking the client list, and left a copy with the correct phone numbers with the firm, but Morgan Stanley was initially unaware of the discrepancy between the list and the altered computerized records, the complaint said.

O’Brien’s notification that he would leave with information about his clients complied with the protocol of almost all U.S. brokerage and advisory firms.

The complaint alleged, however, that O’Brien violated an agreement upon joining Morgan Stanley nine years ago that he would not attempt to solicit clients for a year after leaving.

Morgan Stanley is seeking a temporary restraining order against O’Brien to “prevent further irreparable harm” to the firm, the complaint said.

A Morgan Stanley spokeswoman declined to comment on the complaint. A spokeswoman for Raymond James declined to comment, noting that the firm had not received or been served with any legal complaint.

The case is Morgan Stanley Smith Barney LLC v. O’Brien, U.S. District Court, District of Connecticut, No. 13-01598.

Reporting by Sam Forgione; Editing by Richard Chang

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