Citigroup Inc. accused a former wealth manager of improperly trying to move client accounts worth $636 million to his new employer, Morgan Stanley.
Citi sued Steven I. Taub Thursday in New York state court, alleging he was contacting former clients in violation of a 12-month non-solicitation agreement. According to the suit, Taub, who resigned from Citi last month, has already convinced dozens of clients to move more than $100 million.
A spokesperson for Morgan Stanley declined to comment.
Wall Street firms are highly protective of high-net-worth clients and often take aggressive measures against employees to prevent them from taking their customers to other firms.
Last month, JPMorgan Chase & Co. accused two former private client advisers who had a combined $259 million book of business of trying to bring it with them to Wells Fargo & Co. The two advisers agreed earlier this month not to solicit JPMorgan clients.
Citi is seeking a court order barring Taub from soliciting its clients and using its confidential information pending resolution of a related arbitration. The bank said its clients typically stay with the firm regardless of whether or not employees leave and that the “vast majority” of Taub’s clients came to him because of his employment at Citi.
“Citi spends substantial resources in gaining knowledge about its clients and protecting the privacy of such information,” the bank said in its suit. “It typically takes many years of dealing with clients for Citi to become their primary bank or investing firm.”
Taub, who joined Citi in January 2001, serviced about 431 families and other clients. In addition to the $636 million in assets under management, those clients also had $100 million in deposits, according to the suit.
The case is Citibank NA v. Taub, New York State Supreme Court, New York County.
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