On June 16, 2026, Judge Esther Salas of the United States District Court for the District of New Jersey appointed Wolf Popper LLP as Co-Lead Interim Counsel to represent a class of E*TRADE and E*TRADE from Morgan Stanley accountholders whose cash balances in their brokerage accounts were defaulted by defendants E*TRADE Securities LLC (“E*TRADE”) and Morgan Stanley Smith Barney LLC (“MSSB”) to low-yielding “sweep accounts.”
The Court found that Wolf Popper “possesses the knowledge and experience to ably represent the interests of the class,” that it conducted “extensive research into Defendants’ sweep programs” before filing suit, and that it had “made significant progress” in the litigation, including “negotiating a joint discovery plan, exchanging initial disclosures, comprehensive document requests and interrogatories, and written responses, and engaging in numerous and lengthy meet-and-confer correspondence and videoconference sessions over discovery disputes.”
Judge Salas appointed another prominent class action firm to work alongside Wolf Popper as Co-Lead Interim Counsel, recognizing that the two firms presently serve as interim co-lead class counsel in a cash sweep action against another financial institution, “which makes the Court optimistic that the two entities will be able to work quickly and efficiently with one another.” Judge Salas also took note of the other firm’s representation that “it and Wolf Popper are best positioned to advance the interests of the putative class by using their shared experience and work to limit unnecessary expense and delay.”
In this litigation, Wolf Popper alleges, among other things, that E*TRADE and MSSB’s conduct was in breach of their brokerage agreements’ requirement that they pay a “reasonable” rate of interest on swept cash. For example, in contrast to prevailing market trends, rates at E*TRADE remained stagnant, with interest rates as of January 31, 2024 at 0.01% for balances up to $499,999, 0.05% for balances between $500,000 and $999,999, and 0.15% for balances of $1,000,000 and above. At approximately the same time, the Federal Funds target rate set by the Federal Reserve (and intended to guide rates at U.S. banks) was at 5.25 to 5.50%.