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Firm wins non-solicitation TRO against stockbroker

A brokerage firm has won an injunction against a stockbroker who allegedly stole away with big clients and their money when the broker jumped ship for another financial services firm.

The former senior account executive, Rodney Gray, signed an employment agreement when he left Fidelity Global Brokerage Group Inc. for Morgan Stanley Smith Barney, according to Fidelity. In the agreement, Gray allegedly promised to keep Fidelity’s customer information confidential, not to use Fidelity’s trade secrets and not to solicit Fidelity’s customers for three years after his departure.

Gray left Fidelity on March 31. By Nov. 5, Fidelity was in Alexandria federal court asking for an injunction. Fidelity alleges Gray used its proprietary information to take 12 customers and $9 million in assets from Fidelity.

Fidelity also said some of its customers complained that Gray was breaching their privacy by using customers’ personal information to solicit them for Morgan Stanley, claims that are proceeding through binding arbitration with the Financial Industry Regulatory Authority.

Granting the injunction, Alexandria Senior U.S. District Judge James C. Cacheris said Fidelity had provided numerous specific examples of allegedly improper solicitation by Gray, in violation of his employment agreement.

Although Fidelity manages over $1.5 trillion in assets, each of the solicitations “is a potential example of lost business, lost goodwill, and lost trust,” for amounts that cannot be precisely forecast, the court said.

The Alexandria court entered its temporary restraining order last week.
By Deborah Elkins

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