Award FINRA Dispute Resolution Respondents Morgan Stanley Smith Barney … · 2012. 9. 21. ·...

Award FINRA Dispute Resolution

In the Matter of the Arbitration Between:

Claimant Fidelity Brokerage Sen/ices LLC

Case Number: 11-03937

VS.

Respondents Morgan Stanley Smith Barney LLC Brian Wilder

Hearing Site: Boston, Massachusetts

Nature of the Dispute: Member vs. Member and Associated Person

REPRESENTATION OF PARTIES

Claimant Fidelity Brokerage Services LLC, hereinafter referred to as "Claimant": Jennifer A. Kenedy, Esq., Locke Lord LLP, Chicago, Illinois.

Respondents Morgan Stanley Smith Barney LLC ("Morgan Stanley") and Brian Wilder ("Wilder"), hereinafter collectively referred to as "Respondents": Michael L. Chinitz, Esq., Rose, Chinitz & Rose, Boston, Massachusetts. Brandon F. White, Esq., Foley Hoag LLP. Boston, Massachusetts served as lead counsel at the August 15, 2012 hearing regarding Claimant's request for reasonable attorneys' fees.

CASE INFORMATION

Statement of Claim filed on or about: October 13, 2011. Fidelity Brokerage Services LLC signed the Submission Agreement: October 12, 2011.

Statement of Answer filed by Morgan Stanley on or about: November 17, 2011. Morgan Stanley Smith Barney LLC did not sign the Submission Agreement.

Statement of Answer filed by Wilder on or about: November 17, 2011. Brian Wilder signed the Submission Agreement: November 22, 2011.

CASE SUMMARY

Claimant asserted the following causes of action: breach of contract, misappropriation of trade secrets, unfair competition pursuant to Massachusetts General Laws Chapter 93A, Sections 2 and 11, interference with contracts, and forfeiture of payments under Compensation Plan.

Unless specifically admitted in its Answer, Morgan Stanley denied the allegations made in the Statement of Claim and asserted various affirmative defenses.

FINRA Dispute Resolution Arbitration No. 11-03937 Award of 6

Unless specifically admitted in his Answer, Wilder denied the allegations made in the Statement of Claim and asserted various affirmative defenses.

RELIEF REQUESTED

In the Statement of Claim, Claimant requested that the Panel:

1. Enjoin Respondents and anyone acting in concert with them, effective immediately and for a period of one year, from soliciting, whether directly or indirectly, and whether alone or in concert with others, any business from any customer or prospective customer of Claimant who Wilder served or whose name became known to Wilder while in the employ of Claimant.

2. Enjoin Respondents and anyone acting in concert with them, effective immediately, from using, disclosing, transmitting or continuing to possess for any purpose, the information contained in the records of Claimant, including, but not limited to, the names addresses, and confidential financial information of Claimant's customers or prospective customers who Wilder served or whose names became known to Wilder while in the employ of Claimant.

3. Order Respondents and anyone acting in concert with them to return to Claimant any and all records and/or documents in any form, received or removed from Claimant by Wilder, containing information pertaining to customers or prospective customers of Claimant who Wilder served or whose name became known to Wilder while in the employ of Claimant, within five (5) days from the entry of the Panel's Order, including any and all copies. This requirement includes all records or documents, in any form created by Wilder, Morgan Stanley, or anyone acting in concert with them, based on documents or information that was received or removed from Claimant by Wilder.

Additionally, at a separate hearing on damages, Claimant requested that the Panel award the following relief:

1. Require Wilder and Morgan Stanley to pay damages based upon losses that Claimant has incurred, or profits that Wilder and Morgan Stanley have earned (whichever is greater), as a result of Wilder and Morgan Stanley's wrongful conduct;

2. Require Wilder to disgorge any and all ill-gotten gains and/or award Claimant restitution of all monies wrongfully obtained by Wilder through his willful and illegal actions, including requiring Wilder to disgorge any payments made to him by Claimant pursuant to his Compensation Plan when he misappropriated Claimant's confidential customer information, and was using it to unfairly compete with Claimant by soliciting Claimant's customers to the benefit of himself and Morgan Stanley in violation of Claimant's Compensation Plan and his Employment Agreement.

3. Require Wilder and Morgan Stanley to pay treble damages for willful violation of G.L.c. 93A, Sections 2 and 11, or punitive damages for Morgan Stanley's tortious interference with Wilder's Employment Contract with Claimant; and


4. Require Morgan Stanley to pay Claimant's reasonable attorneys' fees.

Morgan Stanley requested the Statement of Claim be denied in its entirety.

Wilder requested the Statement of Claim be denied in its entirety.

OTHER ISSUES CONSIDERED AND DECIDED

The Arbitrators acknowledge that they have each read the pleadings and other materials filed by the parties.

Respondent Morgan Stanley did not file with FINRA Dispute Resolution a properly executed Submission Agreement but is required to submit to arbitration pursuant to the Code and, having answered the claim, appeared and testified at the hearing, is bound by the determination of the Panel on all issues submitted.

After due deliberation and by Order dated January 12, 2012, the Panel granted Claimant's Motion for Permanent Injunction.

At the hearing. Respondents filed a Motion to Bar Evidence and Claimant objected. After due deliberation the Panel denied Respondents' Motion.

The parties have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered.

ARBITRATORS' REPORT

See Exhibit 1

AWARD

After considering the pleadings, the testimony and evidence presented at the hearing, and the post-hearing submissions, the Panel has decided in full and final resolution of the issues submitted for determination as follows:

1. Respondents Morgan Stanley and Wilder are jointly and severally liable for and shall pay to Claimant compensatory damages in the amount of $81,661.00.

2. Respondent Morgan Stanley is liable for and shall pay to Claimant punitive damages in the amount of $81,661.00. Punitive damages are awarded pursuant to Massachusetts General Laws Ch. 93A Section 11 for willful and knowing violations of Section 2 of the statute.

3. Respondent Wilder is liable for and shall pay to Claimant compensatory damages in the amount of $1,821.00.

4. Respondent Morgan Stanley is liable for and shall pay to Claimant attorneys' fees in the amount of $452,431.58. Attorneys' fees are awarded pursuant to Massachusetts General Laws, Ch. 93A Section 11.


5. Respondent Morgan Stanley is liable for and shall pay to Claimant costs in the amount of $54,321.15. Costs are awarded pursuant to Massachusetts General Laws, Ch. 93A Section 11.

6. Any and all relief not specifically addressed herein is denied.

FEES

Pursuant to the Code, the following fees are assessed:

Filing Fees FINRA Dispute Resolution assessed a filing fee* for each claim:

Initial Claim Filing fee =$ 1,500.00

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firm that employed the associated person at the time of the events giving rise to the dispute. Accordingly, as parties. Fidelity Brokerage Services, LLC and Morgan Stanley Smith Barney, LLC, are each assessed the following:

Member Surcharge = $ 1,500.00 Pre-Hearing Processing Fee = $ 750.00 Hearing Processing Fee = $ 2,200.00

Injunctive Relief Fees Injunctive relief fees are assessed to each member or associated person who files for a temporary injunction in court. Parties in these cases are also assessed arbitrator travel expenses and costs when an arbitrator is required to travel outside his or her hearing location and additional arbitrator honoraria for the hearing for permanent injunction. These fees, except the injunctive relief surcharge, are assessed equally against each party unless othen^/ise directed by the panel.

1. Claimant is assessed:

Injunctive relief surcharge = $ 2,500.00 Additional arbitrator honoraria = $ 1,343.75

2. Morgan Stanley is assessed:

Additional arbitrator honoraria = $ 4,031.25


Hearing Session Fees and Assessments The Panel has assessed hearing session fees for each session conducted. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are:

Four (4) Pre-hearing sessions with Arbitrator @ $450.00 Pre-hearing conferences: November 15, 2011 1 session

March 21, 2012 1 session March 22, 2012 1 session April 12, 2012 1 session

One (1) Pre-hearing session with Panel @ $ 1,000.00 Pre-hearing conference: January 6, 2012 1 session

Thirty-four (34) Hearing sessions @ $1,000.00 Hearing Dates: November 17, 2011 2 sessions

December 5, 2011 2 sessions December 12, 2011 2 sessions December 13, 2011 2 sessions December 21, 2011 2 sessions December 22, 2011 2 sessions January 4, 2012 2 sessions January 5, 2012 3 sessions April 23, 2012 2 sessions April 24. 2012 2 sessions May 10, 2012 2 sessions May 21. 2012 2 sessions May 22. 2012 3 sessions May 23. 2012 3 sessions May 24. 2012 2 sessions August 15. 2012 1 session

= $ 1,800.00

= $ 1,000.00

= $34,000.00

Total Hearing Session Fees = $36,800.00

1. The Panel has assessed $9,200.00 of the hearing session fees to Claimant. 2. The Panel has assessed $27,600.00 of the hearing session fees to Morgan Stanley.

All balances are payable to FINRA Dispute Resolution and are due upon receipt.

FINRA Dtoputo Resolution ArbftFBtfonNo. 11-03937

ARBiTRATlON PANEL

John B. Kinsellagh PaulA. Auerfoach Stephen M. Acerra, Jr.

Public Arbitrator, Presiding Chairperson Public Arbitrator Norv-Public Arbitrator

I, the undersigned Arbitrator, do hereby affinn that I am the individual described herein and who exeojted this instrument which is my award.

Concurring ArbHratoiB' Slanatuiea

in B. Kinsellagh Public Arbitrator. Presiding Chairperson

Signature Date

Paul A. Auerbach Public Arbitrator

Signature Date

Stephen M. Acerra, Jr. Non-Public Arbitrator

Signature Date

September 21, 2012

Data of Sen/tee (For FINRA Dispute Resolution offioe use only)

FINRA OiBfuite Resolution Arbitration No. 11-̂ 937 AwardPaoeSofB

John B. Kinsellagh PaulA. Auerbach Stephen M. Acerra, Jr.

ARBiTRATlON PANEL

Public Arbitrator, Presiding Chairperson Public Arbitrator Non-Public Arbttrator

I, the undersigned Arbitrator, do hereby affirm that I am the Individual described herein and who executed this instrument which is my award.

Concurring Arbltiators* Signatures

John B. Kinsellagh Public ArbitTBrtor, Presiding Chairperson

fjLCLJL,j2 Paul A. Auerbach Public Arbitrator

Signature Date

Signature Date

Stephen M. Acerra, Jr. Non-Public Arbitrator

Signature Date

September 21, 2012

Date of Service (For FINRA Dispute Resolution office use only)

FINRA DieputB Resolution Arbitration Na 11-03937 AVffiirJf̂ flffggfq

John B. Kinsellagh PaulA. Auerbach Stephen M. Acerra, Jr.

ARBITRATION PANEL

Publk: Arbitrator, Presiding Chairperson Public Arbitrator Norv-Publlc Arbitrator

I, the undersigned Arbitrator, do hereby affinn that I am the Individual described herein and who exearted this instrument whidi is my award.

Concurring Arbltratpia' Signatures

John B. Kinsellagh Public Arbitrator. Preskling Chairperson

Signature Data

PaulA. Auerbach Public Arbitrator

Stepoep .̂ Acerra, Non-Public Arbi

Signature Date

Signature Date

September 21, 2012

Date of Service (For FINRA Dispute Resolutton office use only)

EXHIBIT I

FINRA DISPUTE RESOLUTION

Fidelity Brokerage Services, LLC, FINRA Case No. 11-03937

Claimant, V.

Brian Wilder and Morgan Stanley Smith Barney, LLC,

Respondents.

Arbitrators' Report

Claimant Fidelity Brokerage Services, LLC ("Fidelity") seeks damages against Respondents Morgan Stanley Smith Barney ("MSSB") and Brian Wilder for Breach of Contract, Misappropriation of Trade Secrets, Intentional Interference with Contractual Relations, as well as exemplary damages and attorneys' fees for violations of Massachusetts General Laws Ch. 93A. In addition. Fidelity seeks forfeiture of certain payments made to Wilder under the terms of Fidelity's PCG Senior Account Executive 2011 Compensation Plan (the "Compensation Plan"). After reviewing all the evidence and testimony presented, including the pleadings, the prehearing and posthearing briefs submitted by the parties, the Panel rules as follows:

/. Misappropriation of Trade Secrets

Fidelity seeks damages for the misappropriation of its trade secret customer contact list that it alleges was unlawfully used and retained by Wilder and MSSB to improperly solicit Fidelity customers. Respondents argue that Fidelity's customer contact information is not proprietary and that Wilder's taking of a Fidelity customer list was not wrongful because under Massachusetts law he is permitted to "announce" his new affiliation. Respondents contend that since Wilder merely announced and did not solicit. Fidelity's claim for misappropriation of trade secrets must fail.

A party is liable for misappropriation of trade secrets where: (1) the information is a trade secret, (2) reasonable steps were taken to protect the information, and (3) the defendant used improper means to misuse such information. DB Riley Inc. v, AB Engineering Corp., 977 F. Supp. 84, 89-90 (D. Mass. 1997).

Respondents Wilder and MSSB both cite Salomon Smith Barney, Inc. v. Stubbs, Civil Action No. 00-4142 (Mass. Super. Nov. 7, 2000), as well as Bear Stearns & Co., Inc. v. McCarron, Civil Action No. 08-0979-BLS (Mass. Super. 2008) for the proposition that Fidelity's customer contact information cannot be considered confidential. However, Respondents' reliance on both Stubbs and McCarron is thoroughly misplaced. In Stubbs, as well as in McCarron, the departing brokers never executed employment agreements

Fidelity Brokerage Services, LLC v. Brian Wilder & Morgan Stanley Smith Barney, LLC

FINRA #11-03937

with their former employers, and as such, were not constrained by the ternis of any explicit confidentiality or non-solicitation provisions.

In both cases, the court found that if the brokerage finii/plaintiffs wanted to protect their customer lists as confidential information, they would need to assert the proprietary nature of such information by entering into binding non-solicitation and confidentiality agreements acknowledged as such and signed by the employee. Thus, both Stubbs and McCarron are inapposite as they are clearly factually distinguishable from the case at hand.

Here, it was undisputed that Wilder signed an Employee Agreement with Fidelity that contained legally binding non-solicitation as well as confidentiality clauses. The confidentiality clause explicitly stated that Fidelity considered customer lists — including customer contact information — to be its trade secret information. Wilder further signed and acknowledged receipt of a Summary and Acknowledgment form that clearly restated that the customer information enumerated therein was proprietary. Thus, Fidelity clearly asserted trade secret/confidential status in its customer contact information. As such. Wilder was on notice that Fidelity considered this information to be confidential and proprietary.

Furthermore, Craig D'Ambrosia, the Branch Manager of the Framingham, Massachusetts's office where Wilder worked, testified that when Wilder resigned, he reminded Wilder of his ongoing obligations to Fidelity pursuant to the confidentiality and non-solicitation clauses of his Employee Agreement. D'Ambrosia further stated that, prior to Wilder's departure from Fidelity, he handed Wilder a memo summarizing Wilder's ongoing obligations to Fidelity, including his obligation not to use or disclose Fidelity's confidential information or to solicit Fidelity's customers for one year following his separation date. The definition of confidential information explicitly included, among other things, customer lists, customer names and contact information. A copy of Wilder's Employee Agreement was attached to the memo. Mr. D'Ambrosia also testified that he read the memo to Wilder verbatim prior to Mr. Wilder's departure from Fidelity. The Panel found the testimony of D'Ambrosia to be truthful and credible. Thus, unlike the factual situation in Stubbs and McCarron, in this case, the confidentiality and non-solicitation clauses in Wilder's Employee Agreement were a matter of specific acknowledgment and agreement between Wilder and Fidelity.

Under Massachusetts law, Fidelity's customer lists qualify as a trade secret. Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835 (1972); Eastern Marble Prods. Corp. v. Roman Marble, Inc., 372 Mass. 835 (1977). The confidential customer information obtained by Fidelity gives it an advantage over its competitors who do not have access to this data. Testimony at the hearing by Fidelity witnesses established that the company not only secures the customer information through the expenditure of significant resources, but also that it takes stringent measures to guard the secrecy of that information by its vigilance in insuring that access to the information is limited only to those authorized to use it so as to prevent inadvertent disclosure. See also. Stone Legal Resources Group,

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Inc. V. Glebus, 2003 WL 914994 (Mass. Super. Dec. 16, 2002) (customer lists can qualify as legally protected confidential/proprietary information).

It should also be noted that every court from whom Fidelity has obtained a Temporary Restraining Order ("TRO") over the past eighteen months against MSSB has decided the trade secret issue in its favor. See, e.g.. Fidelity Global Brokerage Group, Inc. v. Gray, No. 10-1255, 2010 WL 4646039 (E.D. Va. Nov. 9, 2010).

Respondents fiirther argue that only complex technical or scientific processes can truly qualify as legitimate trade secrets, and since Wilder took from Fidelity merely customer contact information, Fidelity's customer lists don't qualify for legal protection. The Respondents cite no authority in support of this contention where courts have assigned a hierarchical or stratification system for affording protection to some trade secrets but not to others based solely on the technical complexity or the nature of the data compilation of the trade secret in quesfion. More importantly, this assertion is wholly at odds with the holding by the Supreme Judicial Court in Jet Spray Cooler, supra.

Relying on Getman v. USI Holdings. Corp. 2005 WL 2183159 (Mass. Super. Sep. 1, 2005), Respondents assert that there can be no liability for misappropriation of Fidelity's trade secrets here because Wilder merely took contact information for purposes of notifying or announcing to Fidelity customers his new affiliation with MSSB (conduct that is arguably permissible under Massachusetts law).'

The Respondents misconstrue the right to "announce" under Massachusetts law. While it is true that a departing broker is entitled to announce to his former clients by giving them his new contact information, that right must be exercised in a manner that does not diminish or void any legally binding obligations of the broker not to solicit his former clients nor to misappropriate the trade secret customer contact list of his former employer. Nothing in the Getman ruling holds otherwise. It is for this precise reason that courts, in jurisdictions that permit notification, have uniformly stated that written announcements are the preferred method. With these, there can be no question about the nature and content of the initial communication with the former customer. Also, the initial communication with the client is preserved, unlike telephonic announcements.'̂

' Respondents additionally cite UBS Paine Webber v. Dowd. 2001 WL 1772856 (Mass. Super. Nov. 29, 2001) in support of their argument tliat "announcements" are permissible. However, the Chair notes that the significance of the Dowd decision is the court's acknowledgement that evidentiary issues of proof of "solicitation versus "announcing" and the method of announcing chosen by the brolcer are inextricably intertwined. This simply reinforces the contention, as stated by other courts, that written announcements are the preferred method. This is why the Dout/court definitively stated that if a broker sends out only a written wedding style announcement and no more, such a communication will not be construed as solicitation. Dowd at* 3. In the instant case, Wilder chose not to send out written announcements.

• The Panel notes that the decision to announce telephonically was deliberate as Respondents likely knew that Fidelity would never ask its customers to testify to the content of the conversations they had with Wilder after he abruptly resigned from Fidelity and started working at MSSB. Additionally, as Judge Mclntyre observed in her decision, a telephonic announcement is not preserved so there is no record of the communication with the customer.

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If Respondents' argument had legal merit, it would be difficult, if not impossible, for any court under similar factual circumstances to grant an aggrieved securities firm plaintiffs request for injunctive relief for theft of its trade secrets by a departing broker. Judge Mclntyre of the Suffolk Superior Court (who granted Fidelity's request for a TRO in the instant case), found this argument by the Respondents to be unpersuasive. This Panel is similarly disposed.

Based on the facts of this case, namely, that the non-Protocol announcement strategy recommended by his attorney, Jonathan Thau of Luboja & Thau,̂ called for Wilder to announce exclusively by telephone, a closer reading of the ruling in Getman is in order. First, it should be noted that Wilder's one-year non-solicitation agreement with Fidelity was far less than the three-year non-solicitation period by which the insurance agent in Getman was bound. The Getman court stated that, in the context of a departing insurance agent abiding by the terms of a non-solicitation agreement, "To be sure, when a client calls Getman, there is a thin line between him explaining that he has left USI for Cleary and him subtly encouraiging the client to transfer his business from USI to Cleary. Yet, there is plainly a real difference between an insurance agent initiating a telephone call or meeting with a former client and the client initiating that contact himself" Getman, at •44

The Getman court further noted that, in connection with a permissible announcement strategy, "Written notice is preferable to oral notice, because its content can be carefully worded and it does not invite further communication with the client unless the client initiates that communication." Getman, at *4.

For the reasons stated in Getman, and other cases cited herein, the announcement strategy devised and implemented by Wilder and MSSB was fraught with risk. Yet these risks could have been significantly diminished, if not entirely eliminated, by sending out written announcements. Through his attorney, Wilder knew that, in a related FINRA arbitration that resulted in a Stipulated Award (Fidelity Brokerage Services LLC v. Stephen Beatty and Morgan Stanley Smith Barney, LLC, FINRA Case No. 10-05444),

After the Panel entered its Permanent Injunction Order, by letter dated, January 25, 2012, Rose, Chinitz & Rose, counsel for Respondent MSSB, entered an appearance on behalf of Respondent Brian Wilder. Luboja & Thau, former counsel for Respondent Brian Wilder, submitted a Notice of Withdrawal.

The Getman court further noted that even if the former client initiates a discussion with the broker/agent, "it may be solicitation for the insurance agent to deprecate his former employer so as to diminish the good will it would otherwise enjoy, or praise his new employer or otherwise encourage the client to bring his business there." The record contained extensive evidence that Wilder offered to many Fidelity customers comparisons between MSSB and Fidelity's managed asset vehicles. Some of these comparisons were clearly deprecatory to Fidelity. Wilder testified that all such comparisons were made upon the direct request of each customer, but the Panel found Wilder's testimony to lack credibility (see discussion below). This evidence clearly supports the inferences that Wilder was doing more than merely "announcing" and, as noted by the Getman court, crossed over into impermissible solicitation. Wilder also sent numerous emails to Fidelity customers indicating that while at Fidelity he had to service more than 400 customers, whereas at MSSB he would only be dealing with approximately 75.

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Fidelity permitted one of its former brokers to send out written wedding style announcements for a period of 30 days from the date of the award, subject to the condition that all customer contact information be returned to Fidelity.^ Wilder deliberately chose not to avail himself of this option.

The Panel found the reasons Wilder offered in support of his decision to announce exclusively by telephone to be wholly unpersuasive. He testified that written wedding style announcements were too "impersonal." However, given the concomitant risks of announcing telephonically, this explanation seemed rather implausible. Wilder also stated that, because he had a "close personal relationship" with some of his clients, a written announcement would have been an inappropriate method for "reaching out" to these customers. Yet, if his testimony that he had a close rapport with these customers is to be believed, it seems highly unlikely or inexplicable that they would have thrown out or ignored the announcement card or other form of written notification, particularly since Wilder could have easily controlled the type'of written announcement, e.g., by sending just a card with no envelope or by sending a written announcement via Federal Express, thereby reducing the risk that his written announcement would be viewed and summarily discarded as "junk mail".

Since California is another jurisdiction that permits a departing broker to notify clients of his/her new affiliation, a review of some recent decisions interpreting that state's announcement doctrine will prove instructive for this case. In Fidelity Brokerage Services v. McNamara, 2011 U.S. Dist. LEXIS 60325 (S.D. Cal. May 27, 2011), after acknowledging that Fidelity's customer contact information qualified as a trade secret, the court stated that a departing broker .. .may also discuss business with the clients, // invited to do so. But he may not ask the clients for their business or otherwise solicit them to transfer their accounts from Fidelity to Merrill Lynch." McNamara at *3 (Emphasis supplied).

Similarly, in Merrill Lynch v. Chung, 2001 WL 283083 (CD. Cal. Feb. 2, 2001), the departing brokers initially mailed written announcements to former customers. The court held that this was a permissible form of announcement under California law. However, the court found that,

... Defendants did solicit Merrill Lynch customers by placing direct and personal follow-up calls to Merrill Lynch customers. The evidence demonstrates that, on January 12, 2001, Defendants mailed written announcements to Merrill Lynch customers via messenger service, express mail and first class mail. On January 12 and 13, 2001, Defendants further contacted these same Merrill Lynch customers by telephone. During the phone calls initiated by Defendants, Defendants discussed with the customers the potential

The written announcement was identical to that which was cited by the court in the Dowd case.

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transfer of the customers' accounts, the differences between Merrill Lynch and Smith Barney, and, in at least one conversation, why Smith Barney is better than Merrill Lynch. This evidence demonstrates that Defendants most likely stepped over the line between an announcement of new employment and solicitation in their telephone contacts with the Merrill Lynch customers. This conduct constitutes a breach of contract and extends beyond the scope of the announcement doctrine under California law. Chung at *4

See Also, Charles Schwab & Co. v. McMurry, 2008 WL 5381922 (M.D. Fla. Dec. 23, 2008) (repeated initiation of contact with former customers after sending an initial announcement constitutes improper solicitation).

Most importantly, the contention of Respondents that Wilder merely "announced" to his clients, by simply leaving his new contact information, is belied by evidence in the record. The Panel found overwhelming evidence of solicitation, not only with regard to all of Wilder's customers as a whole, which formed the basis for the Panel's granting a Permanent Injunction in favor of Fidelity, but also clear evidence of improper solicitation in particular with regard to each of the seven accounts that transferred to MSSB.

Based on the extensive evidence presented, the Panel found that Wilder, on numerous occasions, not only purportedly announced, he "announced," "announced" and "announced." Documentary evidence established that several customers, who expressed no interest in transferring their accounts to MSSB, received additional solicitations from Wilder. Even if Wilder's initial announcement was proper, repeated announcements to customers, as noted above, constitute improper solicitation. In addition, evidence on the record also demonstrated that Wilder asked some customers to hide his acts of improper solicitation from Fidelity.

Although Wilder testified that he obtained "permission" from all of his customers to send them information, including marketing materials as well as comparisons between Fidelity's managed asset product and that of MSSB, the Panel found this assertion lacked credibility. In support of his contention, Wilder produced handwritten notes that he said were transcribed contemporaneously with his alleged phone announcements to his clients after he resigned from Fidelity. The notes were sparse in terms of specific dates of initial conversations with customers, as well as dates indicating follow-up to customers and when they may have contacted him or returned his calls. The Panel found that the handwritten notes may have been prepared in anticipation of arbitration, and as such, had limited probative value.

It was undisputed that Wilder sent to a subset of the approximately 400 household accounts he serviced at Fidelity overnight packages with enclosed ACAT fornis. This act, in and of itself, constitutes improper solicitation. See, UBS Paine Webber v. Dowd, 2001 WL 1772856 (Mass. Super. Nov. 29, 2001) at *2. Wilder's assertion that every one

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of the approximately 80-90 customers on this list, which included the seven accounts that transferred to MSSB, granted him "permission" to send marketing material and/or ACAT forms is not credible for a number of reasons.

First, email documentation sent by Wilder contradicts or is inconsistent with this assertion. Second, the testimony that every single client on the list of customers to whom he sent an overnight package requested the enclosed ACAT forms strains credulity (particularly since most of these customers did not actually transfer their accounts). Third, MSSB provided substantial financial incentives to Wilder to encourage him to bring the Fidelity customers to MSSB. Evidence on the record, including documents admitted with regard to the seven accounts that transferred, clearly indicated that Wilder went far beyond the permissible bounds of simply announcing his new affiliation to his clients by providing only his new contact infomiation.

Based on this evidence, the Panel was asked nonetheless to believe that every single instance whereby Wilder sought to induce or encourage customers to transfer their accounts was not an impermissible act of solicitation, but rather, was a dutiful response to a request specifically initiated, in every case, by the customer. We found his testimony on these factual matters to be suspect, as it sounded well rehearsed and contrived. Wilder couched his testimony on this issue in terms of "reaching out," or "having a conversation," whereby the customer, by always initiating the request for additional information, "opened-up the door" for him to engage in repeated acts of improper solicitation.

Furthermore, we could not discern from the testimony, one instance in which Wilder followed the announcement script drafted by his attorney,̂ where, during his initial phone conversation with the client, he merely disclosed his new contact infonnation and no more. There was always, according to Wilder, a spontaneous and unsolicited request by the customer for additional information, marketing materials and ACAT forms after his initial announcement phone call.

Respondents additionally argue that Wilder's "announcement" activity was merely an attempt to facilitate customer free choice. In support of this assertion, Respondents cite FINRA Rule 2140. This argument is thoroughly specious, as FINRA Rule 2140 explicitly states that member firms may continue to use non-solicitation/confidentiality clauses in their employment agreements, "to prevent former representatives from soliciting firm customers."

During examination by counsel for the Claimant, Wilder begrudgingly conceded not only that he may have in fact encouraged some of the customers on the ACAT list to transfer their accounts to MSSB, but also that the material he sent customers was indeed

* The script reads as follows: "Hi, this is Brian Wilder. I am calling to let you know that I have decided to leave Fidelity and join Morgan Stanley Smith Barney. 1 will be working at the Morgan Stanley Smith Barney office located at . My new telephone number is . If I can ever be of assistance to you in the ftiture, I hope you will feel free to call."

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marketing information. In light of the fact that Wilder's telephonic communications with his clients could never be preserved or independently verified, the Panel found the testimony of Wilder that in every instance it was the client who initiated the request for marketing materials and information and that he was merely acceding to their wishes to be overtly suspect. Since there was no way in which such self-serving assertions by Wilder could be independently verified, the Panel found such statements to have dubious evidentiary value when according weight to the pertinent testimony. The predicament Respondents faced here was wholly of their own making, since Wilder, by effectuating the "non-Protocol" strategy developed by his attorney, elected to announce telephonically instead of in writing.

The Panel found Wilder's testimony that every piece of markedng information sent was in response to a spontaneous request for information initiated in every single instance by Fidelity customers highly implausible for additional reasons. Wilder was not truthful with the Panel. Supplemental document production by Respondents during the hearing in response to a discovery order revealed that Wilder had attempted to hide or conceal from the Panel the fact that he met with Fidelity customers after the court had entered the TRO. Indeed, when his concealment was revealed, he admitted he had violated the terms of the TRO on at least two occasions. The Panel accordingly found Wilder's overall testimony to be dubious, and as such, unreliable.

In addition, the Panel was troubled by the averments made by Wilder in his Affidavit in Opposition to Fidelity's Request for a TRO. On the day that Wilder represented to the court in his sworn Affidavit that he did not encourage, persuade or solicit the clients he contacted to transfer their accounts to MSSB, evidence produced at the hearing indicated that he sent out email messages soliciting Fidelity customers on that same day.

Two weeks before he resigned from Fidelity, Wilder met with Thau, an attorney paid by MSSB and to whom MSSB referred Wilder to develop a "non-Protocol" recruiting strategy for his transition over to MSSB. After meeting with Thau, Wilder then proceeded to customize a list of Fidelity customer information in conformity with MSSB's business policy and the Protocol for Broker Recruiting (the "Protocol"), to which Fidelity was not a party. He then lied to his Fidelity branch manager about having the list and proceeded to use the list aggressively to solicit Fidelity's customers.

For the reasons noted above, Fidelity has proven by a preponderance of the evidence that Respondents misappropriated its trade secrets and that such theft proximately caused the damages sustained by Fidelity. The Panel is aware that pursuant to M.G.L. Ch. 93 §42, we may, in our discretion, double the damages award for the Misappropriation of Trade Secret claim. We elect instead to assess exemplary damages for a violation of M.G.L. Ch. 93A§1I.

//. Breach of Contract

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For the reasons stated in Section I herein and elsewhere in this opinion, the Panel finds that Fidelity has proved by a preponderance of the evidence that Wilder breached his Employee Agreement and that Fidelity sustained damages as a result of the breach.

///. Forfeiture of Paymerits imder Compensation Plan

Additionally, since Wilder breached his Employee Agreement, Fidelity is entitled to recover commissions paid to Wilder, which he forfeited pursuant to the terms of his Compensation Plan.

IV. Intentional Interference with Contractual Relations

Fidelity is seeking damages for MSSB's alleged intentional interference with their contractual relations with Wilder. In order to prevail on a claim for Intentional Interference with Contractual Relations, a plaintiff must show that he (I) had an advantageous relationship with a third party (e.g., a present or prospective contract or employment relationship; (2) the defendant knowingly induced a breaking of the relationship; (3) the defendant's interference with the relationship, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant's actions. Blackstone v. Cashman, 448 Mass. 255, 260, 860 N.E. 2d 7 (2007). The plaintiff need not prove both improper motive and improper means. Cavicchi v. Koski, 67 Mass. App. Ct. 654 (2006).

The improper means required to prove tortious interference must consist of a violation of a statute or the commission of a common law tort, such as threats, misrepresentations, or defamation. People's Choice Mortgage, Inc. v. Premium Capital Funding, LLC, 2010 WL 1267373 (Mass. Super. Mar. 31, 2010) at *16.

At the hearing, Fidelity established the existence of a binding contract with Wilder that contained confidentiality and non-solicitation provisions. MSSB was aware of the confidentiality and non-solicitation clauses contained in Wilder's Employee Agreement. For the reasons adduced in Sections I and V of this opinion, MSSB knowingly induced Wilder to breach his Employee Agreement through improper means by instructing him to steal Fidelity's trade secrets and to unlawfully solicit Fidelity customers. Wilder concealed the theft by telling Fidelity prior to his departure that he had "shredded all confidential information." MSSB's inducement was intentional, as they instructed other former Fidelity employees to take Fidelity trade secret customer information conforming to the Protocol and MSSB's written Transition Policy.

The Panel found further evidence that MSSB induced Wilder to breach his contract. When he was hired, MSSB paid Wilder what was, in substance, an upfront bonus/forgivable loan in the amount of $420,000 that was linked to achieving certain production levels over time. Testimony by MSSB's branch manager suggested that this type of bonus was consistent with that which would have been offered to recruits from firms that were signatories to the Protocol. The financial inducements offered to Wilder strongly suggest that MSSB knew or should have known that Wilder would have a

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strong incentive to encourage and persuade Fidelity customers to transfer their accounts to MSSB.

The Panel inferred that this financial incentive likely made it difficult in practice for Wilder to adhere scrupulously to the strictures of a lawful announcement strategy. This monetary inducement also was a factor for the Panel in discrediting Wilder's testimony when he claimed that he was in every instance merely responding to client-initiated requests for information. The Panel's view is consistent with the fact that, even after the TRO was entered. Wilder continued to engage in unlawful solicitation — in violation of the terms of that court order.

The Respondents would have the Panel willingly suspend our disbelief and accept the view that Wilder, a recruit from a firm that wasn't a signatory to the Protocol, was conforming with his obligafions under the law, yet, as Judge Mclntyre noted in her opinion, "...MSSB engaged him, permitted him to take client contact information from Fidelity, and yet, did not encourage him to freely solicit his former clients, while new brokers from signatory firms were in their cubicles likely doing so. 1 don't accept this." This Panel is similarly dissuaded.

The Panel finds that Fidelity has proven by a preponderance of the evidence that MSSB intentionally interfered with Fidelity's Employee Agreement with Wilder. Fidelity has been harmed thereby and has sustained damages as a resuh of the tortious interference.

V. Massachusetts General Laws Ch. 93A

M.G.L Ch. 93A §2 provides that, "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawfiil." §11 allows for exemplary damages if the unlawful act was willful and knowing. Furthermore, the finding of a violation of the statute entitles the plaintiff to attorneys' fees and costs. Fidelity seeks damages, attorneys' fees, costs and exemplary damages against MSSB for unfair and deceptive acts or practices pursuant to the statute.

The Panel finds that Fidelity has proven by a preponderance of the evidence that MSSB engaged in unfair and deceptive conduct in violation of Ch. 93A and further that said violation was willful and knowing. Fidelity sustained damages as a result of MSSB's unfair and deceptive conduct.

Misappropriation of trade secrets, as well as interference with contractual relations, are each sufficient for a finding of liability under Ch. 93 A, including a finding that the unfair and deceptive conduct was willful and knowing. People's Choice Mortgage. Inc. v. Premium Capital Funding LLC, 2010 WL 1267373 (Mass. Super. Mar. 31, 2010) at *18; Picciuto v. Dwyer, 32 Mass. App. Ct. 137 (1992); Troy Industries, Inc. v. Samson Mfg Corp., 2012 WL 931641 (Mass. Ct. App. Mar. 21, 2012); Accord, Specialized Tech. Resources, Inc. v. JPS Elastomerics Corp, 2011 WL 1366584 (Mass. Super. Feb. 10, 2011). However, the Panel found additional reasons independent of these two claims for a finding that MSSB engaged in unfair and deceptive practices. The Panel found the

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manner in which MSSB attempted to impose certain terms of the Protocol upon Fidelity, a non-signatory thereto, was manifestly unfair and deliberately deceptive.

Under the terms of the Protocol, brokers who work for firms that are signatories may take customer contact information with them when they resign to work for another signatory firm. Pursuant to the express terms of the Protocol however, the departing brokers must leave a copy of the customer list they are taking with their branch manager prior to their departure. This condition allows the firm to engage in immediate client retention activities. Provided they comply with the terms of the Protocol, the departing brokers are then free to solicit their former customers at their new firms without restriction and without worry.

Since departing brokers at signatory firms can freely take and use customer contact information for purposes of soliciting their former clients, by the very terms of the Protocol, a signatory firm cannot legally assert proprietary trade secret rights in its customer lists. See, Jet Spray Cooler, supra; USM Corp. v. Mar.son Fastener Corp., 392 Mass. 334(1984).

In Smith Barney v. Grijfin, No. 08-0022, 2008 WL 325269 (Mass. Super. Jan. 23, 2008), a post-Protocol case, plaintiff Smith Barney applied to the court to enjoin one of its former brokers from using its customer list to solicit her former clients in her new job at a non-signatory firm. The court rejected Smith Barney's astonishing assertion that, even though it was a willing signatory to the Protocol, its customer lists were somehow in this particular case proprietary confidential information precisely because it was a signatory to the Protocol — an agreement that permits its former employees/brokers to use this exact information to freely solicit their former clients. Griffin at *7.

However, as a non-signatory. Fidelity's customer contact information remains a legally protected trade secret. When a Fidelity broker leaves to work for a Protocol firm, Fidelity's proprietary customer information does not thereby lose its confidential status, become vitiated and converted into a Protocol-compliant list, which the ex-Fidelity broker can then use to freely solicit Fidelity customers. Yet, this is exactly the position MSSB has adopted in this case.

The substantial difference in treatment accorded by the law to Fidelity's and MSSB's respective customer lists is a seminal distinction that reflects the very different business models employed by the two companies within the securities industry. Evidence at the hearing established that Fidelity spends a significant sum of money on direct client acquisition through advertising in television, print and other media. It then provides its brokers with a book of business to service. Fidelity brokers are freed from the drudgery of cold calling and prospecting for business. By contrast, at wire-houses such as MSSB, the individual broker is charged with building a book of business through his/her own efforts. These activities may include for example, cold calling or obtaining lists of potential customers from the firm or purchasing them from third parties. Here, the building up of a retail client base and securing customers through prospecting is largely the result of the individual broker's time and effort.

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In cases where the broker is largely responsible for securing customers, as noted above, courts usually find that the goodwill belongs primarily to the individual broker and not the firm. In contradistinction, since it expends large sums to obtain customers for the company and then delivers these customers to the broker, in Fidelity's case, the goodwill inures primarily to the company, not the broker. See, Getman v. USI Holdings, Corp., 2005 WL 2183159 (Mass. Super. Sep, I, 2005) at *3; Stone Legal Resources Group v. Glebus, 2003 WL 1772856 (Mass. Super. Dec. 16, 2003) at 4; Griffm, supra, at*4. Furthermore, Massachusetts' courts have long recognized that an employer's goodwill is a legitimate business interest that may be protected by enforcing contractual nonsolicitation/non-compete provisions. Al l Stainless, Inc. v. Colby, 364 Mass. 773 (1974); Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280 (1975).

Respondents' discordant references to the Protocol throughout the proceedings were mystifying. At the damages aspect of this case. Respondents argued strenuously that they did not treat Wilder as a Protocol hire. Yet, in the same breath, in their Answers to the Statement of Claim, as well as in their opening statements, they implored the Panel to view the Protocol as the "industry standard" or representative of the "best practices" of the securities industry.

This startling incongruity was most manifest when Respondents argued that there can be no Ch. 93A liability here because recruiting cases like this are "commonplace in the industry and happen all the time." They further contended that since the Protocol represents the best practices in the industry, the conduct in which they engaged can never "attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce." Levings v. Forbes & Wallace, Inc., 8 Mass. App. Ct. 498, 504(1979).

The arguments of the Respondents are as unpersuasive as they are disingenuous. First, MSSB offers no authority for the proposition that the recruiting practices allowed by the Protocol represent the securities industry standard. Indeed, one court has explicitly rejected this argument. See, Hilliardv. Clark, 2007 WL 2589956 (W.D. Mich. Aug. 31, 2007). Second, based on the untenable legal position MSSB adopted in the Griffin case, as noted above, in conjunction with the fact that their own Employment Agreement, which Wilder signed, stipulates that MSSB's customer infonnation is confidential and proprietary, makes their assertion that Fidelity's customer list cannot be afforded the same protection ring especially hollow.

Recruiting cases similar to what transpired in this case are not commonplace in the industry. Recruiting cases where departing brokers may freely solicit former customers by taking client contact information may be common amongst Protocol firms, but are uncommon where one of the firms is a non-signatory like Fidelity. Based on rudimentary principles of contract law, it is axiomatic that Fidelity, as a non-signatory, cannot be bound by nor have the terms of the Protocol imposed upon it by a signatory firm. Proclaiming that the Protocol is the purported industry standard doesn't alter this commercial reality. MSSB made a conscious business decision to join the Protocol, as it undoubtedly was consistent with their strategic business plans. For the same reasons, as

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enumerated above. Fidelity has chosen not to join the Protocol, as it does not comport with their preferred business model.

If MSSB's argument had legal merit, it would, in one fell swoop, render null and void all existing non-solicitation and confidentiality provisions contained in every non-Protocol firm's employment agreement with its brokers. Neither FINRA nor any court has adopted such a position.

To buttress its contention that the facts in this case do not amount to a Protocol hire, MSSB argues that out of a total of over 400 accounts that Wilder serviced only seven actually transferred.^ The Panel draws no such inference. Rather, we find that the fact that only seven accounts moved is evidence that Fidelity has developed substantial goodwill that by law is entitled to protection by enforcing the non-solicitation and confidentiality provisions of its Employee Agreements.

The fundamental unfairness in this case is the imposition of an uneven playing field by MSSB. In light of the fact that MSSB knew full well that, as a non-signatory, the terms of the Protocol were inapplicable to Fidelity, the heads I win, tails you lose posture adopted by MSSB with regard to its selective use of the terms of the Protocol was particularly opprobrious.

When it suited MSSB's purposes, they invoked those aspects of the Protocol that were advantageous to their interests, namely encouraging the theft of a non-Protocol firms proprietary customer lists by contending that these lists, by the very terms of the Protocol and Massachusetts law permitting announcements, can't be trade secrets, and that the Protocol recruiting methods employed represent best or industry practices. But they didn't comply with those mandatory provisions of the Protocol that would be advantageous to Fidelity, namely leaving with the branch manager the customer list the broker is taking with him to a Protocol firm. Fidelity is then forced to incur costs and attorneys' fees protecting their trade secrets, as they must, and MSSB all the while argues that the action for a TRO is for a tiny sum of money because only a small number of accounts actually transferred in this case.

The Panel further found that there was substantial evidence in the record for a finding that MSSB's violation of §2 was willful and knowing. Over the past eighteen months, MSSB has hired (excluding Wilder) five former Fidelity employees (hereinafter referred to as the "companion cases"). Each of the five former Fidelity brokers signed an Employee Agreement with confidentiality and non-solicitation clauses identical to those contained in the Employee Agreement executed by Wilder. Since the instant case as well as the companion cases contained common issues of law and fact related to the hiring

^ Respondents argued that in a true Protocol hire, there would have been a "no holds barred" approach to solicitation, namely that all 400 of Wilder's Fidelity accounts would have received overnight ACAT preprinted packages. Yet, of these 400 accounts, a subset (80-90) representing the most profitable of all the accounts Wilder serviced, c/Zc/receive pre-printed ACAT packages and were aggressively contacted by Wilder. Thus, the "pure" Protocol contrast the Respondents attempt to draw with regards to Wilder's announcement strategy in this case, strikes the Panel as a distinction without a difference.

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practices of MSSB, evidence from the companion cases was admitted for the limited purpose of ascertaining whether the conduct of MSSB in this case was willful or knowing within the meaning of Ch. 93 A, which would support an award of exemplary damages.

A review of the evidence admitted in the companion cases revealed the following: In all but one of the companion cases, the departing brokers were advised by Luboja & Thau, a law firm paid by MSSB to advise the departing Fidelity brokers. In four of the companion cases, the departing brokers submitted a resignation letter to their respective branch managers notifying them that any questions concerning their new employment should be directed to Luboja & Thau. Prior to their departure, just as Wilder's branch manager, Craig D'Ambrosia, had done, the brokers were reminded by their branch managers of their continuing non-solicitation and confidentiality obligations to Fidelity pursuant to the terms of their Employee Agreements. Testimony on the record established that in one of the companion cases, the broker told his branch manager that he wasn't taking any confidential information with him. Wilder made a similar representation to D'Ambrosia indicating that he had "shredded all confidential information."

Additionally, in each of the five companion cases, after their resignations. Fidelity learned that the brokers took its confidential customer lists and unlawfully solicited Fidelity customers in breach of their Employee Agreements. In at least three of the companion cases, Fidelity obtained a TRO enjoining MSSB and the former Fidelity brokers from using Fidelity's customer list to solicit Fidelity customers. In each of these three cases, MSSB was ordered by the court to return all Fidelity confidential information.

In response to a letter from Fidelity's legal department seeking assurances that the brokers in two of the companion cases were abiding by the terms of their Employee Agreements, Luboja & Thau responded by letters each dated November 22, 2010, that, "we are assured by Mr. Beatty [Mr. Fassenfeld] that he is not in possession of any confidential or proprietary client information gained as a result of his employment by Fidelity, and has not imparted such information to his new employer or any third-party."

The Panel observes that the representations made by Luboja & Thau, noted above, were highly misleading. Indeed, shortly after sending the two letters referenced above, in compliance with an additional two TRO's obtained by Fidelity against Beatty and later Fassenfeld, Luboja & Thau on December 10, 2010, sent another letter to Fidelity enclosing the exact customer contact information taken by Beatty which they had suggested previously in their correspondence with Fidelity the broker did not possess.

Additionally, in each of the five companion cases, the former Fidelity broker signed MSSB's Financial Advisor Account Transition policy & Acknowledgement for the Recruiting Protocol (hereinafter "Transition Policy") that read in relevant part, "This policy sets forth the Firm's expectations regarding the transition of client accounts to Morgan Stanley Smith Barney from any other broker-dealer."' (Emphasis supplied). The

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Transition Policy specifically permitted brokers to take the following information from their former firms: client name, address, phone number, email address and account title. Notably, the taking of this information is consistent with the terms of the Protocol.

Although the conduct in the companion cases did not form the basis for the Panel's finding a Ch. 93A violation in this case, the evidence admitted with regard to the companion cases clearly establishes the following with regard to MSSB's conduct in the instant case: at the time they hired Wilder, not only was MSSB, as a named Respondent in the previous TRO's, clearly on notice that Fidelity asserted protectable trade secret status in their customer lists, but that every court that issued a TRO had thoroughly repudiated MSSB's arguments to the contrary. In light of the numerous court decisions that rejected their assertion that Fidelity's customer lists did not constitute a trade secret as well as the argument that the departing broker was only announcing his new affiliation, MSSB nonetheless adopted and effectuated the exact same "non-Protocol strategy" with Wilder.

Here, the evidence clearly established that MSSB's unfair and deceptive conduct in hiring Wilder was thoroughly consistent with the pattern and practice they employed in the companion cases: Knowing that Fidelity was not a Protocol firm, MSSB nonetheless instructed recruits to steal Fidelity's proprietary customer information, convert that information into a Protocol-compliant list and then use that information wrongfully to solicit Fidelity customers.

In this case. Wilder acknowledged that approximately two weeks before he resigned from Fidelity, he met with an attorney (Jonathan Thau) from the same law firm paid for by MSSB and to whom MSSB referred the other brokers in all but one of the companion cases. After meeting with Mr. Thau, Wilder then proceeded to prepare a Protocol-compliant customer list by extracting information from Fidelity's confidential customer database in confomiity with MSSB's written Transition Policy. Thus, the familiar pattern utilized by MSSB in the companion cases repeated itself here in the recruitment of Wilder. The hst Wilder culled from Fidelity's confidential customer data was substantially similar in all material respects to the customer lists prepared by each of the brokers in the companion cases.

MSSB's Boston branch manager, Rob Malenfant, stated that Wilder's signing of the Acknowledgment Form indicating he had read and signed the Transition Policy was a "mistake", and the Panel was told that an additional witness would confirm and elaborate on the circumstances surrounding this mistake (although this witness was never produced at the hearing). In addition, the contention that Wilder signed the Transition Policy "in error" was inconsistent with the statement of MSSB's branch manager in New York, who testified in a FINRA arbitration in one of the companion cases, that it was the corporate policy of MSSB to have recruits sign the acknowledgment form regardless of whether or not the new hire is from a Protocol firm. Most importantly, evidence in the record also revealed that in every one of the five companion cases, the brokers signed MSSB's Acknowledgment Form as well.

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Fully cognizant of the fact that its "non-Protocol strategy" employed in the companion cases was defective, most notably for its incorporation of MSSB's position that Fidelity's customer contact information was not a trade secret, MSSB nonetheless effectively ratified the exact same "non-Protocol" strategy developed by Luboja & Thau in the instant case. Mr. Malenfant testified that outside counsel used to advise non-Protocol hires had to be approved by MSSB's legal department. He also testified that he was aware of the strategy developed by Luboja & Thau in this case with regard to Wilder and he participated in its implementation.

After meeting with Mr. Thau, Wilder unlawfully misappropriated Fidelity's confidential customer information. He concealed the theft by lying to his branch manager about possessing same, and then began using Fidelity's trade secret information aggressively to solicit FideUty's customers, all under the guise of irmocuously "announcing" his new affiliation — utilizing a notification method which numerous courts have considered improvident. Furthermore, despite their pious assertion that all confidential material was returned to Fidelity, Respondents retained this proprietary information and returned it only when ordered to do so by the court that issued the TRO.

The Panel finds the conduct by MSSB here somewhat perplexing and wholly at odds with their assertion that the Protocol represents the industry standard for the hiring of brokers from other firms. If the Protocol represents the "best practices" within the securities industry, why wasn't Wilder advised to leave a copy of the customer list he was taking to MSSB with his Fidelity branch manager, a condition expressly required by the Protocol? ^

Although MSSB's Boston branch manager, Mr. Malenfant, testified that he was unaware of Wilder's attempts to solicit Fidelity customers, documentary evidence established that he worked with Wilder to set up meetings with former Fidelity customers, encouraged Wilder to "pound the phones," and received regular updates on the status of Wilder's efforts to acquire former Fidelity customers. The evidence also indicates that there was lax or scant supervision over the activities of Wilder in order to insure that he was abiding by the terms of his Employee Agreement with Fidelity (in addition to lax or scant supervision of his email and written correspondence to prospective clients to ensure compliance with FINRA and SEC rules, particularly the rules governing the presentation of comparative performance information). Wilder further testified that no one at MSSB told him that he could not make multiple announcements. See Chung; McNamara. supra. Indeed, Wilder admitted that on at least two occasions, he violated the terms of the TRO by meeting or attempting to meet with Fidelity customers.

" Indeed, if application of the Protocol in this case is representative of the industry standard as Respondents argue, why the need to refer Wilder to an attorney paid by MSSB for implementation of a "non-protocol" hiring strategy? The conduct of MSSB here is wholly inconsistent with their assertion that the conduct in which they engaged can never rise to the level of rascality sufficient for a finding of Ch. 93A liability.

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Based on the documentary evidence as well as testimony on the record, the Panel concluded, that for purposes of complying with his legal obligations to Fidelity as well as complying with the terms of the court-ordered TRO, Wilder was left to his own devices — with predictable results.

MSSB knew the law on announcements; they knew the clear admonition expressed in the Getman case, and in other case law as well, concerning the inherent risks of engaging in solicitation by announcing telephonically instead of in writing; they were fully aware that, in the real world context of retail brokerage, providing inducements and incentives to Wilder in the fonn of what was, in substance, a $420,000 up-front bonus/forgivable loan pegged to production levels, made it hardly surprising that he would exceed the permissible parameters of announcing and cross-over into improper and unlawfiil solicitation. Nonetheless, they deliberately chose, once again, to execute the same "non-Protocol" strategy that was implemented in the companion cases to the detriment of Fidelity. Here, they did so at their peril.

In this case, the Panel was mindful of the integral nexus between MSSB and Luboja & Thau — a law firm paid by MSSB and to whom it referred Wilder as well as all but one of the Fidelity recruits in the companion cases for implementation of the "non-Protocol" recruiting strategy referenced herein. The Panel takes note of the fact that every court which considered the "non-Protocol" strategy and the legal issues incidental thereto, including the trade secret status of Fidelity's customer contact infonnation as well as the enforceability of the non-solicitation clauses in the former Fidelity brokers' Employee Agreements, rejected the legitimacy of that strategy.

The subterfuge employed by MSSB, as delineated above, was made all the more egregious by the fact that the theft of Fidelity's trade secret customer information placed Fidelity in the untenable position of inadvertently violating SEC Regulation SP. Fidelity's Chief Privacy Officer testified that the removal of Fidelity's customer list violated federal securities regulations, and this testimony was unrebutted by MSSB.

VI. Attorneys' Fees

Because the Panel has found that MSSB engaged in unfair or deceptive acts or practices within the meaning of §2 of M.G.L. Ch. 93A, Fidelity is entitled to an award of reasonable attorneys' fees and costs under § 11 of the statute. Fidelity seeks reimbursement of $484,142.29 in attorneys' fees and $54,321.15 in costs.

In determining the reasonableness of attorneys' fees under Ch. 93 A, the court considers several factors. Those factors include: the difficulty of the legal and factual issues, the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the results obtained, the experience, reputation and ability of the attorneys, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases. Linthicum v. Archambault, 379 Mass. 809,381,388-89(1979).

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It should be noted however, that the Linthicum factors are considerations the court employs in determining the reasonableness of fees; they are not legal presumptions. No one factor is determinative, and, while the appellate courts remind us that a factor-by-factor analysis is helpful, it is not required. Ross v. Continental Resources, Inc.. 73 Mass.App.Ct. 497 (2009).

The Panel is not bound by any of the factors delineated in Linthicum. Rather, the reasonableness of the fee is a question left to the sound discretion of the Panel, who is in the best position to determine how much time was reasonably spent on the case and the fair market value of the attorney's services. Berman v. Linnane. 434 Mass. 301, 303 (2001).

Thus, the reasonableness of the Claimant's request for attorneys' fees is a matter solely within the exclusive discretion of the Panel. The Panel's review of the reasonableness of the Claimant's request for attorneys' fees in the instant case is based on their first-hand experience with the nature of the proceedings, the legal and factual issues that needed to be resolved, as well as the level of proof required in terms of successfully prosecuting the case. The Panel is also in the best position to detennine whether the total hours spent by Claimant were reasonable and whether the proceedings were unnecessarily and unjusfifiably delayed and/or protracted by the conduct, posture or tactics of one or both of the parties.

Fidelity utilized the services of Locke Lord, LLP, a national law firm based out of Chicago. Jennifer A. Kenedy, a partner in the firm's Chicago office, acted as lead counsel in this arbitration proceeding. Ms. Kenedy's efforts in this case were supported by two associates with substantial experience in restrictive covenant/trade secret law. Ms. Kenedy devotes approximately 60% of her practice to prosecuting cases involving trade secret theft and violation of restrictive covenants. Ms. Kenedy represents Fidelity as its national counsel in similar types of litigation matters throughout the United States.

The Panel finds that given the skill, experience and reputation of Ms. Kenedy, the rates charged by her firm were eminently reasonable. Ms. Kenedy's nonnal 2012 billing rate is $665/hour, but she discounts her rate by 17% for Fidelity to $558/hour. The rate charged by Locke Lord to Fidelity is far less than that charged by attorneys in the Boston area with comparable skill, education and experience. See Specialized Tech. Resources, Inc. V. JPS Elastomerics Corp, 2011 WL 1366584 (Mass. Super. Feb. 10, 2011), where the court found that rates of $560-$885 for partners are reasonable for trade secret theft/Ch.93A cases with complex or novel legal issues.̂

Fidelity also used the services of Beck Reed Riden, LLP as local counsel in this matter. Given the skill and experience of Russell Beck, the Panel finds that the discounted rate of $425/hour that he charged Fidelity is reasonable. The Panel notes that, while Fidelity incurred legal fees of only $11,589.71 from the services provided by Beck Reed Riden in

' See also, Affidavit of J. Owen Todd, where the hourly rates in Boston for attorney's of comparable experience and skill as that of Ms. Kenedy and Mr. Beck would be between S650-$l,000/hour.

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connection with this proceeding, Mr. Beck attended most of the scheduled fifteen days of hearings held in this matter without charging for his time spent at the hearings.

Lastly, Fidelity incurred $14,249.29 in fees from contract attorneys through Counsel on Call, which was used for document review during the discovery phase of the arbitration. The Panel notes that the engagement of Counsel on Call represented good litigation management as it helped keep Fidelity's legal fees as low as possible in connection with this matter. Had Locke Lord employed some of its first year associates to conduct the document review required by the discovery orders, the legal fees incurred by Fidelity would have far exceeded the $14,249.29 charged by Counsel on Call.

Ms. Kenedy presented detailed billing records that summarized accurately the work performed on this case. The bulk of the billing entries submitted in connection with Claimant's request for attorneys' fees related to preparing for and attending the fifteen days of hearings at both the injunctive as well as the damages aspect of this case. The Claimant produced detailed records that documented the time spent on the case. Most of the entries are reflective of standard tasks associated for the preparation and prosecution of a civil litigation matter: preparation of outline for direct and cross-examination of witnesses; preparation of witnesses for direct and cross-examination; review and selection of documents to be introduced as exhibits, etc.

As noted above, not only were the hourly rates charged by counsel for the Claimant reasonable, in light of the fifteen days of hearing conducted in this matter, the hours expended by counsel for the Claimant on this case were reasonable as well. This is all the more evident in view of the complex and novel issues presented as well as the successful results achieved.

This was a contentious case where many of the substantive factual matters as well as a number of the legal principles involved were bitterly contested by the parties. Discovery at both the injunctive relief phase as well as the damages aspect of this case was rancorous and required numerous pre-hearing conferences to resolve discovery disputes and/or motions to compel. Both parties filed comprehensive and exhaustively detailed legal memorandum in support of or in opposition to pending prehearing motions; both parties filed lengthy prehearing briefs.

From the outset, the Respondents adopted what can be characterized as a Maginot Line defense to the action filed by Fidelity. After Claimant filed its Statement of Claim, Respondents opening gambit in this arbitration was to argue strenuously that no

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discovery was permissible in a FINRA expedited hearing for injunctive relief'°

This was a complicated case. In order to prevail on their M.G.L. Ch. 93A, claim Fidelity was tasked with proving to the Panel, by a preponderance of the evidence, a number of related but indispensable claims/issues, including intent, establishing that Fidelity's customer contact information was a trade secret; proving that MSSB intentionally interfered with Fidelity's contractual relations with Wilder; and, that they deliberately misappropriated their trade secrets and used the proprietary information unlawfully.

It should also be noted that since Wilder's attorney devised the announcement strategy, counsel for the Claimant was circumscribed, due to the attorney/client privilege, by her inability to inquire into the reasons why Wilder believed that his announcement strategy was permissible under Massachusetts law. Despite this constraint, Ms. Kenedy's deft examination of Wilder and other adverse witnesses elicited substantial and relevant evidence that was critical in the Panel's ruling in favor of the Claimant. Indeed, Ms. Kenedy's entire cross examination strategy, clearly the product of careful and exhaustive preparation, was masterfully executed.

The Respondents urge the Panel to make substantial reductions to the fee request submitted by Fidelity on the grounds that the attorneys' fees requested were disproportionate to the amount of damages that could be awarded to Fidelity. The Panel declines to do so for a number of different reasons. First, the Panel can appreciate the fact that, at the time they tendered their written submissions on the issue of attorneys' fees, both parties were unaware of the amount of damages, if any, the Panel would be awarding. Now that the actual damages awarded by the Panel have been disclosed, the disproportionality argument of Respondents can be readily dismissed.

Even if the amount of attorneys' fees were grossly disproportionate to the amount of damages. Respondents offer no authority that would support their contention that a central requirement in ascertaining the reasonableness of the fee request is that the fees must bear a reasonable relationship to the amount of damages involved. First, the "amount of damages involved" factor is but one of many the Panel may consider; like all the other factors, its applicability to the case at hand is not mandatory, but rather purely discretionary with the Panel. Secondly, the statute itself plainly states that the attorneys' fees shall be awarded irrespective of the amount of damages awarded. Indeed, there are

The Chair first encountered the tenacity of Respondents litigation defense strategy when, during oral argument on Fidelity's Motion to Compel the Production of Documents, MSSB made the astonishing argument that no discovery whatsoever was permissible in a FINRA expedited hearing for injunctive relief. MSSB proffered this bad-faith argument in spite of the fact that it iuid itself recently served on Fidelity tfurty-sLx requests for production of documents and twenty requests for information in advance of an expedited FINRA iiearingfor injunctive relief in one oftlie companion cases l/ie prior year (Fidelity Brokerage Services, LLC v. Rodney Gray. FINRA # 10-05013). Such obdurate tactics and duplicity typified the entire arbitration, and in no small measure were responsible for the protracted nature of the proceedings.

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cases where courts have awarded substantial attorneys' fees where the damages were nominal or non-existent. See, Hanover Ins. Co. v. Sutton, 46 Mass. App. Ct. 153 (1999).

Respondents further contend that Fidelity's attorneys' fees should be reduced because this case was not novel or complex, but rather a common, "garden variety" case of a financial advisor leaving one brokerage firm to go work for another." Respondents yet again take a selective snippet of Judge van Gestel's opinion in the Dowd case, namely, that, "these brokers move around with astounding frequency, and the whole industry knows it..." and attempt to use these isolated comments to bootstrap their spurious argument that the entire financial services industry engages in the same conduct about which Fidelity complains.

Respondents further argue that Fidelity spent an inordinate and impermissible amount of time trying this case and now should have its fee request substantially reduced because it should have known from its inception that this was a small case that could only yield at best nominal damages. Respondents additionally claim that Fidelity had settled other similar claims against MSSB for modest sums and that since this dispute was another "garden variety" case as the others, Fidelity could have settled the instant case instead of "over lawyering" and generating enormous attorneys' fees they now seek to impose on MSSB.

The claims adduced here by Respondents are wholly without merit. First, the contention that the attorneys' fees incurred by Fidelity are unjustified because somehow. Fidelity was supposed to concede at the beginning of this matter that its damages could never be more than de minimis is ludicrous. The Panel has assessed damages and they are not nominal. Thus, the argument of the Respondents is a veritable non sequitur. Secondly, the reason Fidelity did not settle this case as it did some of the other companion cases is

' ' Respondents have repeatedly cited the Dowd case, most notably, by taking a few isolated comments made by Judge van Gestel in that opinion out of context, and then using these comments selectively to bootstrap the fallacious argument that their conduct can never attain a level of rascality sufficient for Ch. 93A liability since this type of conduct is well known to "the whole industry." A few comments on the Dowd case are in order.

First, Dowd is a pre-Protocol case. Secondly, the broker in Don't/sent out written wedding style announcements to customers whereas in the instant case. Wilder announced exclusively by telephone. These two facts alone belie the Respondents' contention that the "instant dispute involves essentially the same facts and legal issues..." as in the Dowc/case.

Furthermore, the Respondents "the whole industry does it" argument doesn't pass muster when one examines Judge van Gestel's opinion in a subsequent post-Dowc/case. In Morgan Stanley DfV, Inc. v. Clayson, 19 Mass. L. Rptr. 201, 2005 WL1009651 (Mass.Super.2005), Judge van Gestel noted that of the 29 injunctive relief cases brought in the Business Litigation Session since 2000, 21 (72%) had been brought by three prominent wire house firms: Morgan Stanley, UBS and Smith Barney.

Are Respondents prepared to argue that these three (now two) wire house firms are synonymous, in all material respects, with the entire financial services industry? A reading of the Clayson case is instructive here, because it reveals the shallowness of "the whole industry does it" claim repeatedly asserted by Respondents in an attempt to attain exoneration for their unlawful conduct.

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due to the recidivist behavior of MSSB. After settling the Beatty and Virello cases. Fidelity had expectations that MSSB would cease its unlawful conduct in encouraging its recruits to misappropriate Fidelity's trade secret customer infonnation and use this infonnation to unlawfully solicit Fidelity customers.

Such hopes were short-lived. After MSSB settled with Fidelity in the Beaty and Virello matters, MSSB shortly thereafter continued to engage in the same unlawful and deceitful conduct (instructing recruits to take Fidelity's proprietary customer lists and encouraging them to use that information to unlawfully solicit Fidelity's customers). Since obtaining injunctions against MSSB had proven insufficient to deter its repeated and ongoing chicanery, it was at this juncture that Ms. Kenedy, as Fidelity's lead counsel, opted to pursue an entirely different litigation strategy. As noted and discussed at length in other Sections of this Decision, once Fidelity decided to seek exemplary damages and attomeys' fees under the provisions of M.G.L. Ch. 93A §2 and §11, the entire legal and factual complexion of this case changed dramatically.

The unyielding litigation stance adopted by the Respondents wholly undermines their claim that the instant arbitrafion was a simple "garden variety" case that did not warrant the time to which Fidelity devoted to its prosecution. Were the case as simple and as uncomplicated as Respondents contend, why the doggedness of their defense? Why the determined and inexplicable refusal to stipulate to uncontroverted facts? Why the implacable resistance to produce relevant documents? As duly observed by the Panel during fifteen days of contentious hearings, the manner in which the Respondents defended the action belies their assertion that the case was an unsophisticated and simple garden-variety matter that Claimant could have easily settled.

In light of the perfidious conduct by MSSB, as enumerated above, the implication of the Respondents that Fidelity's attorneys' fees should be reduced because it could have settled the case with MSSB is simply jaw-dropping. Indeed, the Panel adopts the view that a significant amount of the attorneys' fees incurred by Fidelity can be directly attributable to the litigation posture adopted by Respondents. Having witnessed the entire proceedings from start to finish, the Panel finds that the attorneys' fees generated by Fidelity in large part were due to the scorched earth litigation tactics employed by the Respondents from the beginning of this arbitration to its end.

It is instructive to note, as Respondents correctly point out, that Fidelity has pursued injunctive relief against firms other than MSSB that have misappropriated its trade secret customer information, yet those arbitrations (both the injunctive relief and damages hearings) typically lasted 2-4 days. As counsel for Claimant notes, Fidelity did not suddenly decide to have this case take 15 days to litigate when several others not involving MSSB took so few. Fidelity's Reply Brief, p. 14.

As noted by the Claimant, some of the tactics employed by Respondents that needlessly prolonged the proceedings include the following:

> making multiple oral requests for broad categories of documents only after it became apparent that Fidelity would be permitted discovery, which required

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Fidelity to review and produce a large number of documents in a very short period of time;

> failing to produce several hundred pages of evidence of Wilder's overt and aggressive solicitations until after the injunction hearing (and after Wilder's testimony denying solicitation), which required a second cross-examination of Wilder and the MSSB Branch Office Manager at the damages hearing to show they had not been truthful during the injunction phase;

> insisting on obtaining documents in discovery that are irrelevant to this case, such as all communications relating to Wilder's performance at Fidelity for two full years prior to his resignation;

> performing unnecessarily lengthy cross-examinations of witnesses, often covering the same questions, issues and information several times;

> insisting that the 93A claim, which Fidelity presented during the eight-day injunctive phase of the case, be re-litigated during the damages phase all anew because Respondents argued it would then present an opposing case and bring in various additional witnesses addressing 93A, only to then call the same witnesses and have them testify to the same identical facts at the damages hearing; and

> falsely testifying under oath in an affidavit filed with the court, and repeatedly on the stand, which required substantial additional work by Fidelity between hearings and significantly extending Fidelity's examinations of Wilder and the MSSB Branch Office Manager during both the injunctive and damages hearings in order to objectively prove up every fact Mr. Wilder and Mr. Malenfant falsely asserted or incredibly denied.

Claimant's Reply brief, p. 13.

As Claimant duly notes: "Respondents are not entitled to a deduction from Fidelity's fees where their own conduct created the need for much of the expense contested." Having observed the proceedings firsthand, the Panel wholeheartedly agrees. Respondents will not presently be heard to complain about exorbitant attorneys' fees when the Stalingrad defense tactics they so willingly adopted were responsible for a substantial amount of those same fees now assessed against them. See, Lipsett v.Blanco, 975 F.2d 934 (1st Cir. 1992).

One of the central purposes behind the fee shifting provisions of Ch. 93A, § 11 is that it helps deter misconduct by affording plaintiffs who succeed in proving violations under §2, reimbursement for their legal services and costs. Commonwealth v. Fall River Motor Sales. Inc., 409 Mass. 302, 316 (1991;; Trempe v. Aetna Casualty and Sur. Co., 480 N.E. 2d 670, 676 (Mass. App. Ct. 1985) (there is a benefit to the public where deception in the marketplace is brought to light...). The unfair and deceptive conduct engaged in by MSSB, as noted above, makes an award of §11 attorneys' fees here particularly fitting.

In order to maintain the legal status of its trade secret customer information. Fidelity is obligated — as MSSB well knows — to assiduously protect and guard against its unauthorized disclosure or use. The law requires such vigilance. See, Jet Spray Cooler, supra. Each time MSSB has misappropriated Fidelity's confidential customer

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information and instructed its recruits to unlawfully solicit its customers. Fidelity has been forced to incur substantial attorneys' fees in order to obtain injunctive relief against MSSB, and in the absence of settlement, to file for expedited injunctive relief with FINRA. In short, the inequifies here are well pronounced, as securing injunctive relief is a necessary, but very costly exercise for Fidelity.

The modus operandi of MSSB is evident: make the protection of its trade secret customer information enormously expensive for Fidelity, and then argue to arbitration panel(s) that the damages at stake are ininiscule. Any awards assessed against MSSB are simply viewed by it as the cost of doing business. The Panel observes that the remorseless litigation posture adopted by MSSB in this case is consistent with its conscious business policy to make Fidelity's protection of its trade secrets as costly as possible. Given the dynamics of the litigation/arbitration process for a party seeking injunctive relief with all its attendant and requisite procedures, the cost/benefit ratio has been decidedly favorable to MSSB.

The Panel's award of attorneys' fees is an attempt to address these inequities and to redress the remedial imbalance inherent when Fidelity, a non-Protocol firm, seeks to thwart the repeated attempts by MSSB, a signatory firm, from pilfering its trade secrets and unlawfully soliciting its customers. Such an equitable reapportionment of the attomeys' fees incurred by Fidelity will force MSSB to reassess the financial viability of the cost/benefit calculus they have previously employed.

Respondents argue that the attorneys' fees should be reduced by the amount incurred in connection with obtaining a TRO from the Suffolk Superior Court. The Panel declines for a number of reasons. As a condition for obtaining permanent injunctive relief in an expedited arbitration proceeding, Fidelity was compelled by FINRA Rule 13804 to first obtain a TRO from the Superior Court.

Furthermore, where the expense of a related action is a foreseeable consequence of the defendant's unfair or deceptive act or practice, it is recoverable under Ch. 93A. Miller v. Risk Mgmt. Found, of the Harvard Med. Insets., Inc., 36 Mass. App. Ct. 411 (1994). Here, since securing the TRO was a necessary procedural prerequisite for obtaining permanent injunctive relief from the Panel, attorneys' fees incurred in connection with the TRO are compensable as those fees arose from a "single chain of events," namely the misappropriation of Fidelity trade secret customer information. DiMarzo v. Am. Mut. Ins. Co., 389 Mass, 85, 106(1983).

The Panel finds the following reductions in Fidelity's request for attorneys' fees to be warranted. The Panel reduced the amount of travel time billed to Fidelity by Ms. Kenedy ($36,549) by 25%, a $9,137.25 reduction. While billing for travel time to a client may be standard operating procedure based on a contractual agreement between the client and attorney, the Panel believed that in a 93A fee-shifting scenario, the amount here was somewhat excessive. In addition, the Panel reduced the fee request by $22,573.46 to reflect the fact that while most of the billing entries were sufficiently detailed and the

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work performed adequately summarized, other entries (particularly those made in cormection with travel time) were somewhat sparse in tenns of specificity.

The bulk of Fidelity's costs incurred in connection with this arbitration relate to Ms. Kenedy's travel expenses and the cost of transcribing the fifteen hearing sessions. The Panel finds that these costs are entirely reasonable and are approved as submitted.

VIL Conclusion

The conduct engaged in by MSSB in this case represents an unfair method of competition in the securities industry precisely because it attempted, either explicitly, implicitly or through nefarious and surreptitious means, to impose upon Fidelity, a non-Protocol firm, mles of commerce by which it never agreed to be bound. This isn't fair competition; it's an illicit and improper rigging of the rules — a stacking of the deck — to favor one competitor over another.

An award of attorneys' fees, costs and exemplary damages pursuant to M.G.L Ch. 93A §2 and § 11 is an appropriate remedy here, particularly since the entry of repeated injunctions against MSSB have failed to deter its unlawful conduct.

On behalf of the Panel,

Inhn Kinsel laph

September 13, 2012

John Kinsellagh Chairman

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Award FINRA Dispute Resolution Respondents Morgan Stanley Smith Barney … · 2012. 9. 21. ·...

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