Morgan Stanley will begrudgingly pay Merrill Lynch $1 million in damages because they poached a team from the rival last year.Interestingly, none of the 5 team members, who were led by William Claridge and Patrick Lewis, were charged with violating their contracts, even though Merrill brought charges against them for doing so.
The judge ruled that only Morgan Stanley should be held liable for the poaching.
Morgan Stanley isn’t happy about paying –
“We disagree with the ruling and do not believe it was supported by the facts,” a Morgan Stanley spokesman told Reuters on Friday.
“Win some, lose some. You never really know why arbitration panels rule the way they do,” another spokesman told Clusterstock.
But maybe they should be. Reuters says the team generated more then $1.4 million in fees and commissions from clients with $215 million in assets – in one year.
So basically, poaching them was probably worth $1 million.
Merrill challenged the hires in June last year, accusing Morgan Stanley of raiding and unfair competition and said the brokers were guilty of breach of contract and breach of fiduciary duty.