Morgan Stanley claimed in a lawsuit that a former advisor is soliciting former clients and bleeding revenue meant to go to the widow of a Morgan Stanley advisor.
The wirehouse filed its complaint against Gregory Chevrier, who moved from Morgan Stanley to Wells Fargo last month after six years with the wirehouse. When he joined Morgan Stanley, Chevrier signed a non-solicitation and non-compete agreement and acknowledged the “confidential” client information at the firm, according to the complaint. He also signed a Former Advisor Program Agreement.
As a part of this agreement, advisors who retire from Morgan Stanley receive a percentage of revenue on client accounts they managed for up to five years as long as those accounts remain at Morgan Stanley. (If the advisor dies, the revenue goes to their estates.)
Morgan Stanley claimed that nearly all the $280 million in client assets Chevrier managed fell under such an agreement. Water Grubbs, an advisor who died in December 2020, previously oversaw the assets. Grubbs’ widow was the beneficiary of a FAP Agreement, according to Morgan Stanley.
The wirehouse argued Chevrier agreed not to solicit any clients who fall under the FAP Agreement for the remainder of the payment period, which expires at the end of 2025.
Chevrier resigned from Morgan Stanley’s office in Newport News, Va., on Feb. 7 and immediately began working at Wells Fargo. When he resigned, Morgan Stanley contacted Chevrier to “remind” him of his non-solicitation agreements. Wells Fargo’s counsel responded, saying the advisor “took no information or documents from Morgan Stanley and is not soliciting,” according to the complaint.
Representatives from Wells Fargo declined to comment.
But Morgan Stanley claimed Chevrier hasn’t been keeping up his end of the bargain, with the wirehouse accusing him of contacting former clients “on multiple occasions,” with one client claiming the advisor was calling every other day.
Chevrier allegedly offered one client “unbelievable” fee structures to sweeten the deal in moving the accounts to Wells Fargo and allegedly told former clients the Morgan Stanely advisor who inherited the accounts after his departure was “inexperienced” and that the wirehouse was “in trouble,” falsely claiming the firm fired its CEO. (Ted Pick succeeded James Gorman as CEO earlier this year, with the wirehouse stating Gorman decided to step down from the role.)
Morgan Stanley claimed the soliciting of clients under the Grubbs FAP agreement was “particularly troubling,” as Grubbs’ widow would lose revenue from accounts that left Morgan Stanley for Wells Fargo, according to the complaint.
Morgan Stanley is seeking a temporary restraining order and preliminary injunction against the advisor.
Chevrier joined the industry in 1995, with prior stints at Lincoln Financial and Merrill Lynch before joining Morgan Stanley in 2018, according to BrokerCheck.