JPMorgan Chase Bank & Co. sued six of its former brokers who defected together to Morgan Stanley this spring for allegedly telling clients if they stayed with JPMorgan their accounts might be serviced by a call center, among other claims.
The $2 billion team out of Morristown, N.J., resigned in February, though it did not begin with Morgan Stanley for up to three months because of garden leave agreements the JPMorgan employees had signed, according to legal documents filed with the N.J. District Court.
JPMorgan is seeking a restraining order against the six brokers — Michael Pudlak, Michael Reynolds, Mead Briggs III, Jason Meyer, Lori Rabinowitz and Steven Christensen — while the Financial Industry Regulatory Authority Inc. decides an arbitration case regarding their departure from JPMorgan.
The brokers worked with about 400 families while at JPMorgan and generated about $15 million in annual revenue, the complaint said.
“During their solicitation calls to JPMorgan customers, defendants are making disparaging and defamatory statements about JPMorgan,” the brokerage said in its May 7 complaint. “These statements are false and defamatory and defendants are deliberately seeking to damage JPMorgan's reputation to JPMorgan's clients in order to convince such clients to move their accounts to defendants at Morgan Stanley.”
In addition to telling clients their accounts may be serviced by a call center if they remained with JPMorgan, the complaint also said the brokers disparaged the product mix available to the firm's clients.
The brokers deny claims they wrongfully solicited clients from JPMorgan.
“I have complied fully with any contractual obligations with regard to alleged “solicitation,” having merely announced my change of employment to the clients,” Mr. Pudlak said in a court document.
He denied taking client information, saying he created a handwritten list of his 11 biggest clients and used Google search to find contact information for those clients, he said in the document.
An attorney for the brokers, Jonathan Thau of Luboja & Thau, said he wasn't authorized to comment on pending litigation. Morgan Stanley spokeswoman Christine Jockle had no comment.
JPMorgan did not respond to a request for comment.