Ex-Bear Exec Can't Join Morgan Stanley: Judge
A U.S. federal judge has temporarily blocked a former senior Bear Stearns executive from jumping to Morgan Stanley and recruiting clients and colleagues to follow him.
U.S. District Judge Nathaniel Gorton in Boston issued the order against Douglas Sharon Thursday, 10 days after the former Bear executive director resigned, court papers show.
The judge concluded that Bear was likely to succeed on the merits of the case and, absent relief, would suffer irreparable harm.
Sharon's lawyer, Joshua Pemstein of Foley Hoag LLP, was not immediately available for comment. Morgan Stanley also did not immediately return a call seeking comment.
Bear, crippled by a liquidity crisis, agreed this week to be acquired by JPMorgan Chase in a transaction valuing it at $10 per share. JPMorgan is offering bonuses to many Bear employees to persuade them to stay.
According to Bear's complaint filed Wednesday, Sharon was executive director of Bear's private client services group in Boston, generating $5.12 million of annual commissions and overseeing more than $867 million of client assets.
Bear accused the 20-year company veteran of failing to give the required 90 days notice before resigning.
It also said Sharon was in the office the weekend before he resigned, as others copied confidential documents such as account statements.
Meanwhile, Bear accused two sales assistants who worked exclusively with Sharon, and who also quit on March 17, of printing a large number of records in the prior week.
"The Boston office printed out so many thousands of client account statements that the office exhausted its entire storehouse of paper," Bear said.
Bear sued the same day it asked a New York State court in Manhattan to block client solicitations by five other workers who jumped to Morgan Stanley and UBS AG.
A hearing on Bear's motion for a preliminary injunction in the Sharon case was set for April 3, court papers show.