Goldman Sachs Subsidiary Successfully Enjoins Departing Analyst From Sharing Information With UBS

AYCO CO LP, a unit of Goldman Sachs, has successfully obtained a preliminary injunction, enjoining a former analyst from sharing information with his new employer UBS Financial Services.  The lesson simple -- when a financial services professional is transferring from one firm to another it is imperative that she obtain legal counsel concerning restrictive covenants and make certain that: (1) the broker protocol, if applicable, (2) all enforceable contractual commitments, and (3) all common laws, including trade secret laws, are complied with.  Failure to comply with the broker protocol and/or a suggestion of misappropriation of trade secrets or breach of a restrictive covenant can have extremely deleterious effects on both the transitioning employee and receiving firm.  In this matter, the transferring group had a trailing 12 months' commission and fees in excess of $3 million and $558 million in client AUM.  http://www.onwallstreet.com/news/ubs-goldman-sachs-ayco-2667905-1.html.  An injunction that limits the management or transfer of this type of business can have a very significant impact on employee compensation and the receiving firm's perception of its new employees.  Further, if a departing broker violates a restrictive covenant or the common law without the receiving firm's knowledge, it is likely the transferring employee will suffer an adverse employment action; perhaps even finding himself without his former or new job.