Morgan Stanley needs a federal court docket to difficulty a restraining order in opposition to a former advisor who allegedly left for Raymond James solely days after taking up the accounts of a not too long ago retired rep.
Morgan Stanley filed the lawsuit in Florida federal court docket in opposition to Corbin Hoffner, who, till a number of weeks in the past, had been an advisor on the agency’s Sebring, Fla., workplace. In keeping with the go well with, Hoffner joined Morgan Stanley in 2020 with out business expertise. The next 12 months, Hoffner allegedly partnered with Greg Seaton, who was with Merrill Lynch for greater than twenty years earlier than becoming a member of Morgan Stanley in 2012, based on SEC information. Seaton acquired about 90% of the fee revenues from these shoppers, and Hoffner agreed to a confidentiality coverage as a part of his employment, based on the go well with. Seaton’s consumer base represented about $90 million in managed belongings, producing about $600,000 for the agency in 2024.
On Aug. 27, Morgan Stanley and Seaton despatched letters to his shoppers informing them of his upcoming retirement. Each the agency and Seaton stated Hoffner could be taking up the accounts; Seaton advised shoppers that he had “full confidence” in Hoffner, based on the go well with. Although he would retire, Seaton would proceed to revenue from his shoppers by means of Morgan Stanley’s Former Advisor Program, stipulating that Seaton would proceed to get a portion of consumer income for 5 years so long as these shoppers remained with the agency.
However two days later, on Aug. 29, Hoffner abruptly resigned and joined Raymond James, based on the go well with. Hoffner left with two different advisors, Dale and Matthew Grubb, and Joella Libero, a Morgan Stanley worker who assisted Seaton, to type The Grubb Group at Raymond James.
Raymond James didn’t reply to a request for remark previous to publication. A Morgan Stanley spokesperson stated it “will take applicable motion to make sure that departing staff adjust to their authorized obligations.”
In keeping with the go well with, Hoffner started an “aggressive marketing campaign” to solicit Seaton’s former shoppers, allegedly telling them that Morgan Stanley was “so large” that the agency “wouldn’t enable latitude to service smaller prospects.” Morgan Stanley alleged that Hoffner even falsely advised shoppers his former department was closing.
Morgan Stanley claims it instantly contacted Hoffner to cease soliciting however allegedly didn’t obtain a response. The agency additionally speculated that Hoffner could have taken confidential consumer info and stated that after Hoffner left, Morgan Stanley staff discovered many information for shoppers Seaton and Hoffner labored with in a shredding bin to be destroyed.
The agency is in search of a brief restraining order that may stop Hoffner from soliciting any of his former shoppers whereas Morgan Stanley and the advisor enter arbitration proceedings.