J.P. Morgan Securities filed a motion Tuesday to hold Christopher J. Lee, a former advisor, in contempt of court for allegedly violating a temporary restraining order. The motion claims Lee emailed J.P. Morgan clients after the order barred him from soliciting them on behalf of Morgan Stanley, his new employer.
The motion was filed in the Supreme Court in the State of New York. A judge followed with an order to show cause for contempt Wednesday, requiring Lee to appear in court on Sept. 23 to explain his actions.
J.P. Morgan claims Lee sent clients what the bank called a "blatant sales pitch, numerous Morgan Stanley Smith Barney marketing materials, and promises to 'follow up.'" The bank said the clients were J.P. Morgan clients whom Lee serviced or learned of only through his employment.
"These clients were never 'his' clients to take; they are JPMorgan clients whom Lee serviced and/or learned of only through his employment," the motion states.
"The record demonstrates Mr. Lee brazenly disregarded the Court's order and continued to engage in solicitation of JPMorgan's clients," said Pablo Rodriguez, spokesperson for J.P. Morgan Wealth Management. "We trust the Court will see the facts similarly and dispense consequences accordingly."
Richard Weinhaus, executive director at J.P. Morgan, said in an affidavit filed in support of the contempt motion that the clients Lee emailed were pre-existing clients of J.P. Morgan or its affiliate bank. They were not clients Lee brought over from his previous brokerage, he said. A spokeswoman for Morgan Stanley did not return a request for comment by press time.
J.P. Morgan requested the temporary restraining order after Lee and Joseph Minaudo left their New York branch for Morgan Stanley earlier this year. The firm claims the two violated post-employment restrictive covenants by soliciting J.P. Morgan clients.
One client, a husband and wife, told J.P. Morgan that Minaudo was putting on a "full court press" to get them to move their accounts to Morgan Stanley, according to the petition for injunctive relief. Minaudo told them he would waive Morgan Stanley's management fees if they moved their accounts to him, the petition said.
The advisors managed about $1.85 billion in assets under management when they left the bank. The vast majority of their clients were either pre-existing J.P. Morgan clients at the time they were assigned to them or J.P. Morgan Chase clients that bank associates referred to them, the petition said.
Before the restraining order was issued, about 50 households, representing $175 million in assets, moved to Morgan Stanley, Weinhaus said in his affidavit. After the order was issued, an additional 180 clients with more than $375 million in assets transferred over.
