Charles Schwab Corp. won more than $7.3 million from Morgan Stanley and two financial advisers it accused of stealing trade secrets when they moved to the latter firm in 2019.
The arbitration award in favor of Schwab was disclosed Friday in a New Jersey federal court filing by Morgan Stanley, which is seeking to confirm the amount and move on from the dispute.
But the bank said the two advisers, Christopher Armstrong and Randall Kiefner, who it fired for violating its transition policy, are still refusing to pay their share.
"Morgan Stanley may not agree with the arbitration panel's award but, unlike Armstrong and Kiefner, will fully honor all of its obligations under the award," the bank said Friday.
Morgan Stanley and Schwab didn't immediately respond to emailed requests for comment. A lawyer who represented Armstrong and Kiefner in the arbitration wasn't immediately available for comment.
Schwab sued Armstrong, Kiefner and Morgan Stanley over the advisers' March 2019 departures, claiming they stole trade secrets and breached their contracts.
After they were fired by Morgan Stanley, the two men turned around and sued the bank for breach of contract and and defamation, among other claims. They said Morgan Stanley told them their actions were legal and promised to cover their costs in any dispute with Schwab.
$425 Million Book
According to Armstrong's complaint, he once managed $425 million in client assets at Schwab but, by 2018, his book of business was shrinking by $35 million annually as elderly clients died or withdrew money as required by minimum distributions.
