Funds News

Bear seeks to stop ex-employees from wooing clients

A Bear Stearns sign is pictured at its office in Hong Kong's Central district March 17, 2008. REUTERS/Victor Fraile

NEW YORK (Reuters) - Bear Stearns Cos Inc BSC.N asked a court on Wednesday for an injunction to prevent five former employees from using Bear Stearns' client lists in their new jobs at other banks.

The request for an injunction comes as Bear Stearns struggles to hang onto clients after a run on the bank forced it earlier this month to agree to sell itself to JPMorgan Chase for a fraction of its prior market value.

Bear Stearns asked the New York State Supreme Court in Manhattan to force the former employees to return client lists or papers they had taken from the company and to prevent them from contacting Bear Stearns' clients for the purpose of taking their business to their new employers, UBS AG UBSN.VX and Morgan Stanley MS.N.

Bear said in its court filing that former employees who solicited its clients were violating contractual obligations.

Bear asked for a restraining order and a preliminary injunction as it prepares an arbitration claim for the Financial Industry Regulatory Authority.

Morgan Stanley and UBS declined to comment.

Bear said in its filing that Peter Budd may seek to take clients to UBS, and that Edward Moldaver, William Nash, Grant Devaul and Alexander Sugar may try to take clients to Morgan Stanley. Efforts to reach each of them for comment were unsuccessful.

Bear Stearns agreed on Sunday March 16 to sell itself to JPMorgan in a deal originally worth about $2 a share. JPMorgan has since sweetened its offer to about $9.60 a share, and made other moves to help cinch the deal.

Reporting by Emily Chasan, Dan Wilchins and Edith Honan; Editing by Toni Reinhold/Andre Grenon