Inter--Brokerage TRO Pact?

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Sep 13, 2006 9:01 pm

Did anyone notice the article on the home page (of registered rep.com) about Morgan Stanley joining the "Inter-Brokerage TRO Pact"? 


There has been a lot of talk on here about non-compete agreements and the inability to contact clients within 1-2 years after leaving a B/D. According to the article, the pact "stipulates that members will not sue brokers departing to other firms when they try to take their clients with them—as long as they are moving to another firm named in the pact..."


I thought there would be A LOT of people interested in this article so go to the home page and read it.  Very good information to know as a broker.  The article states that Merrill Lynch, UBS, Smith Barney and now Morgan Stanley are among several firms in the pact.  This essentially nullifies the pre-employment contracts I believe.


Anyway, good stuff to know.  Check out the article.


Sep 18, 2006 2:18 pm

Do any of our legal friends have experience (good/bad) using this pact?

Sep 18, 2006 3:11 pm

This pact places the client's comfort and preferences first by making it easier for them to follow their brokers - if they choose to do so.

There are still a few things that are forbidden under this pact.  For example, you shouldn't talk to your clients about your intent to leave before resigning.  Also, you can't take certain company confidential information with you when you leave.

Your recruiter and new branch manager can help you recognize and  avoid these pitfalls.  But overall, this should make it much easier for brokers to vote with their feet.

Sep 19, 2006 2:07 pm

What about brokers leaving a firm who is a member of the pact for a firm who's not a member of the pact.  Any problems with that?

Sep 19, 2006 2:56 pm
FormerWirehouse:

What about brokers leaving a firm who is a member of the pact for a firm who's not a member of the pact.  Any problems with that?



The pact would not apply.  The losing brokerage's response would depend on the specific agreement terms, state & other case law and the circumstances of the departure.