A Bear Stearns broker is free to take his clients with him to his new digs at Morgan Stanley, a Massachusetts judge ruled today.
A judge in the U.S. District Court in Massachusetts denied Bear Stearns’s request to impose a temporary restraining order on Doug Sharon, who jumped ship the day after J.P. Morgan made a deal to buy the firm. Sharon, a broker and managing director at Bear Stearns Boston office, left the firm on March 17 and joined Morgan Stanley. The TRO was requested on the grounds that Sharon breached his employment contract by not giving a 90-day written notice about his departure, misappropriated confidential Bear Stearns information and wrongfully induced both clients and other Bear employees to join Morgan Stanley.
The judge said there is no evidence proving Sharon persuaded clients to join him at his new firm. Sharon says he worked the weekend of March 15 to reassure clients that their savings were safe, and says he took no documents when he left. His assistant admits to printing out client information but only “for protection in case Bear Stearns did not open for business the following Monday,” and denies printing client information at Sharon’s request.
Bear Stearns failed to demonstrate that it will suffer irreparable harm (a factor that’s weighed heavily when granting a TRO) due to Sharon’s newfound employment at Morgan Stanley, the judge said. Further, granting a TRO against Sharon would “likely result in a loss of his professional standing and the inability to advise his clients in times of economic turmoil.”