Fighting for the Scraps at Bear

Score one for Bear Stearns.

The beleaguered investment bank has persuaded a federal judge to prevent — at least for now — the former head of its Boston office from taking Bear's best employees and clients with him to his new job at Morgan Stanley.

District Judge Nathaniel Gorton in Boston forbid former Bear executive director from asking any clients and colleagues to join him at Morgan Stanley.

Gorton issued the temporary order after concluding that Bear Stearns was likely to prevail in a lawsuit against Sharon, but would suffer irreparable harm if the floundering firm had to wait for the suit to wend its way through the courts.

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In the lawsuit, Bear Stearns says that Sharon spent the weekend of March 15 and 16 — while the firm was struggling for survival and seeking help from the Federal Reserve and J.P. Morgan Chase — copying client records.

Within days of resigning on Monday, March 17, Sharon began asking those customers to move their accounts over to his new employer, Morgan Stanley. Bear Stearns based its allegations on computer records and security-camera videotape.

In the suit, reported today in the Boston Globe, Bear Stearns also accuses Sharon of trying to persuade some of his colleagues to join him at Morgan Stanley, too. It added that Sharon breached his employment contract by not giving the firm 90 days notice of his plan to quit.

Morgan Stanley and other Wall Street firms aggressively pursued Bear's top performers after the depth of the firm's problems became apparent two weeks ago.

J.P. Morgan chief executive Jamie Dimon pointedly asked his fellow C.E.O.'s to back off while his bank tried to salvage Bear, though Sharon had already decamped to Morgan Stanley by then.

Sharon's lawyer, Joshua S. Pemstein of Foley Hoag in Boston, declined to comment.

by Mark Stein

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