MORGAN STANLEY DW INC v. CARLINSKY (2003)

Order, Supreme Court, New York County (Richard Braun, J.), entered on or about December 31, 2002, which denied plaintiffs' motion for a preliminary injunction restraining defendants from representing former Morgan Stanley employees, now employees of Bank of America (BofA), in a series of pending arbitration proceedings or in any future litigation related to such arbitrations, unanimously affirmed, with costs.

Supreme Court properly exercised its discretion in denying plaintiffs' motion seeking a preliminary injunction barring defendants, by reason of defendant Carlinsky's prior representation of Morgan Stanley, from representing several BofA employees in two separate arbitrations brought by Morgan Stanley DW Inc. in Texas and California.   Plaintiffs failed to show that defendant Carlinsky's recent representation of Graystone, a division of Morgan Stanley & Co., in Graystone Wealth Mgt. Servs. v. Guidance Capital LLC., bore a substantial relationship to plaintiffs' instant NASD arbitration proceedings wherein Carlinsky and his new law firm are representing former Morgan Stanley employees who never worked at Graystone, but rather, were retail securities brokers who worked at Morgan Stanley DW Inc. (see Code of Professional Responsibility DR 5-108[A][1] [22 NYCRR 1200.27(a)(1) ];  Jamaica Pub. Serv. Co. v. AIU Ins. Co., 92 N.Y.2d 631, 636, 684 N.Y.S.2d 459, 707 N.E.2d 414).   Under the circumstances of this case, the motion court also properly concluded that plaintiffs did not demonstrate it was likely that Carlinsky had obtained confidential information in his prior representation of Graystone that he could use to benefit his current BofA clients in the arbitration proceedings (see Code of Professional Responsibility DR 5-108(A)[2] [22 NYCRR 1200.27(a)(2) ];  Jamaica Pub. Serv. Co., supra at 637, 684 N.Y.S.2d 459, 707 N.E.2d 414).