Morgan Stanley claimed in a lawsuit that a former adviser is soliciting former clients and siphoning off proceeds that were intended to go to the widow of a Morgan Stanley adviser.
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 accepted “confidential” client information at the firm, according to the complaint. He also signed a deal for the former adviser's program.
As part of this arrangement, advisers who retire from Morgan Stanley receive a percentage of the earnings on client accounts they managed for up to five years as long as those accounts remain with Morgan Stanley. (If the advisor dies, the proceeds go to their estate.)
Morgan Stanley alleged that nearly all of the $280 million in client assets that Chevrier managed fell under such an arrangement. Water Grubbs, an adviser who died in December 2020, previously oversaw the assets. Grubbs' widow was the beneficiary of a FAP settlement, according to Morgan Stanley.
Teli has argued that Chevrier agreed not to solicit any customers covered by 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 work at Wells Fargo. When he resigned, Morgan Stanley contacted Chevrier to “remind” him of his non-solicitation agreements. Wells Fargo's adviser responded, saying the adviser “did not receive information or documents from Morgan Stanley and is not seeking one,” according to the complaint.
Representatives from Wells Fargo declined to comment.
But Morgan Stanley claimed Chevrier did not hold up his end of the bargain, with the call office accusing him of contacting former clients “on multiple occasions”, with one client claiming the adviser was calling daily.
Chevrier allegedly offered a client “unbelievable” fee structures to sweeten the deal in transferring accounts to Wells Fargo and allegedly told former clients the Morgan Stanely adviser who inherited the accounts after he left was “inexperienced ” and that the wire house was “in trouble”. ” falsely claiming that the firm fired its CEO. (Ted Pick succeeded James Gorman as CEO earlier this year, with Wirehouse says Gorman decided to step down from the role.)
Morgan Stanley alleged that the solicitation of clients under the Grubbs FAP agreement was “particularly troubling,” since Grubbs' widow would lose income from accounts Morgan Stanley left for Wells Fargo, according to the complaint.
Morgan Stanley is seeking a temporary restraining order and preliminary injunction against the adviser.
Chevrier joined the industry in 1995, with previous stints at Lincoln Financial and Merrill Lynch before joining Morgan Stanley in 2018. according to BrokerCheck.