Bear Stearns Sues Former Brokers

Posted by John Carney, Mar 27, 2008, 9:07am

The Bear Stearns deal is getting messier. Wall Street rivals are poaching the best talent, forcing JP Morgan to promise lots of compensation money to keep them in place or face acquiring Bear with only the losers left. Unfortunately for the best laid plans of the Fed and JP Morgan, the uncertainty over the deal is leading many Bear employees to figure they'd be better off taking offers from competitors.

So now Bear is fighting back, asking a New York State court to issue restraining orders against departed brokers who Bear claims are soliciting the firm's clients to do move their business to the new company, Kate Kelly and Robin Sidel of the Wall Street Journal are reporting. These solicitation lawsuits are nothing new on Wall Street but they come at a very awkward time for Bear and JP Morgan. Morale is already low. The lawsuit puts a spotlight on the fact that many of the best employees and customers may have already left the firm, and doesn't exactly reassure worried employees that Bear is friendly toward its cubs.

One Bear recently departed Bear employee we spoke with this morning wondered how hard any former Bear employee would have to try to solicit clients away from the company.

"If you've read the papers, you know no-one wants to do business with Bear. They don't hate their own contacts, though. So if you hear your broker, or the desk you dealt with, has moved over to, say, Morgan Stanley, why wouldn't you move? Keep your business in a failing firm with people you don't know or join the pack and stick with who you know. Not a hard choice," he said.

Bear Seeks Restraints On Departed Brokers [Wall Street Journal]

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Posted in: Bear Stearns
Tags: Brokers, Clear Channel

Comments

Posted by guest, Mar 27, 2008 9:29AM

Carney do you edit these articles before you post them? Come on guy, you are better than that. I agree with this former Bear person though, makes no sense to keep your biz there. This "merger" is going to be a god damn mess, tied up in litigation and bad feelings, best of luck guys. This will drag out for so long Dimon will rue the day he ever got involved with that s-show formerly known as BSC

Posted by John Carney, Mar 27, 2008 9:45AM

9:29,

We do our best to avoid typos, and appreciate when readers help us spot errors. Please email us at tips@dealbreaker.com.

As for your question, we don't employ copy editors and the time between writing and publication on the site is very short. Copy-editing oneself is a notoriously tricky business. Please keep in mind that errors, typographical and otherwise, make it into the New York Times and the Wall Street Journal on a regular basis. It's an inevitable feature of tight deadline publication.

Posted by guest, Mar 27, 2008 10:51AM

Were the pursors on the Titanic required to 'hang around'? BSC is a sinking ship - ABANDON SHIP WHILE YOU CAN! Hey JPM, slavery is OVER! People are free to work where they want! Deal with it! It's not like you're not sending jobs to India either.

Posted by guest, Mar 27, 2008 10:52AM

@ Carney -- I think most DB readers appreciate faster posting of items.

Most of us could care less about typos.

You should see me rIGHt an email.

Good post on CC, btw.

Posted by AJ, Mar 27, 2008 11:12AM

Carney, I find the typos endearing

Posted by guest, Mar 27, 2008 12:38PM

Rookie tax question:

Do Bear employees get to claim capital gains losses till infinity (and shield the IRS from collecting $5 Billion in taxes) for their vested/restricted stock?

Posted by guest, Mar 27, 2008 1:11PM

Rookie -- I don't think so since it's stock-for-stock. No realization event = no taxable credit.

Posted by guest, Mar 27, 2008 1:16PM

Gotta love how Jamie Dimon fires people on a moment's notice but he expects them to tether themselves to this trainwreck. In this rapidly weakening job market, passing up a certain job offer for a possible job at a floundering institution is an illogical decision, regardless the possibility of a retention bonus.

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