{"id":5161,"date":"2011-06-20T00:00:00","date_gmt":"2011-06-20T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/06\/federal_law_preempts_challenge"},"modified":"2022-04-04T13:34:46","modified_gmt":"2022-04-04T18:34:46","slug":"federal-law-preempts-challenge","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/federal-law-preempts-challenge\/","title":{"rendered":"Federal Law Preempts Claims that Morgan Stanley Smith Barney LLC’s Insider Trading Detection Policies are Unlawful Under California Statutes, Says District Court"},"content":{"rendered":"

According to the U.S. District Court for the Central District of California, federal law preempts would-be class claims accusing Morgan Stanley Smith Barney LLC<\/a> of having insider trading detection and deterrent policies that are illegal under California labor and unfair competition statutes. The court says that \u201cconflict preemption\u201d precludes the claims and that letting the plaintiffs move forward with them would create an obstacle to Congress\u2019 objectives in enacting federal securities laws.<\/p>\n

Per the court, Morgan Stanley set up employee trading policies to prevent and monitor insider trading. Under the ETPs, employees who had certain kinds of brokerage accounts had to either keep them in-house or disclose and get approval for the accounts to be housed at another firm. However, in 2008, because of possible \u201cstate law implications\u201d regarding its policy, Morgan Stanley put into practice granting California employees that asked for an exeption approval as long as they gave the financial firm duplicate brokerage account confirmations and statements.<\/p>\n

The plaintiffs of this lawsuit, who are all ex-Morgan Stanley employees, contended that under California labor statute, the firm\u2019s policy was unlawful. Morgan Stanley\u2019s lawyer responded by arguing that federal law preempts the plaintiffs\u2019 claims.<\/p>\n

The plaintiffs intend to bring their case to the U.S. Court of Appeals for the Ninth Circuit. Their lead lawyer has said that the brokerage firm\u2019s plan forced the securities traders to pay \u201chuge fees for their own advice.\u201d<\/p>\n

Related Web Resources:<\/strong><\/p>\n

Marcia Bloemendaal, et al v. Morgan Stanley Smith Barney<\/a>, Justia, June 14, 2011<\/p>\n


\nMore Blog Posts:<\/strong>
\nMBIA Can Sue Morgan Stanley Over Alleged Misrepresentation of MBS Risks, Says US New York Supreme Court<\/a>, Institutional Investor Securities Blog, June 14, 2011<\/p>\n

Ex-Morgan Stanley Trader to Settle SEC Unauthorized Swaps Trading Claims for $150,000<\/a>, Stockbroker Fraud Blog, June 13, 2011<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

According to the U.S. District Court for the Central District of California, federal law preempts would-be class claims accusing Morgan Stanley Smith Barney LLC of having insider trading detection and deterrent policies that are illegal under California labor and unfair competition statutes. The court says that \u201cconflict preemption\u201d precludes the claims and that letting the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3787],"tags":[],"class_list":["post-5161","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-morgan-stanley"],"yoast_head":"\nFederal Law Preempts Claims that Morgan Stanley Smith Barney LLC's Insider Trading Detection Policies are Unlawful Under California Statutes, Says District Court — Investor Lawyers Blog — June 20, 2011<\/title>\n<meta name=\"description\" content=\"According to the U.S. District Court for the Central District of California, federal law preempts would-be class claims accusing Morgan Stanley Smith — June 20, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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