Morgan Stanley Owes Little Fiduciary Duty (January 6, 2006)
January 6, 2006
Morgan Stanley Owes Little Fiduciary Duty (January 3, 2006)
In 2002, Morgan Stanley DW, Inc. sold its online business and online accounts to rival broker Harris Direct. At the time of the transfer, customers were free to terminate their accounts at any time. The company was accused of breaching its duty of loyalty to its customers when it transferred the customers’ online accounts. Applying California law, the court found that Morgan Stanley owed almost no fiduciary duty to the client, and therefore Morgan Stanley was not in breach.