A $500 million team from Morgan Stanley Smith Barney's office in Eugene, Oregon has left to set up an independent advisory firm, but is facing a legal challenge from the giant brokerage firm on the issue of poaching clients, according to Investment News.

Sapient Private Wealth Management, which launched yesterday, is headed by managing partner Greg Erwin, along with the two other founding principals, Alan Rexius and King Martin, reports the news service.

All three are MSSB veterans, and it is reported the decision was driven by the wish to work independently, with increased flexibility and autonomy, as opposed to for a rival firm.

However, a legal tussle has ensued, with MSSB reportedly obtaining a restraining order against the three men which prohibits them from contacting clients who do not appear on a list provided to their former employer under the recruitment protocol. This is a voluntary agreement among major firms which allows departing advisors to take clients with them as long as they provide a list of these clients when they leave.

Clay Skurdal, the manager of MSSB’s Eugene office, said the new principals of Sapient have contacted clients which did not appear on an 11-page list of clients’ names they provided on departure, according to the publication, which cites court records.

The Sapient advisors, meanwhile, reportedly claim the list was in fact 105 pages long and double-sided. And Erwin has said he expects the majority of the $500 - $600 million in assets the team was managing at MSSB to be transferred to the new firm.

The three advisors worked with outsourcing provider Focus Financial Partners to set up Sapient, and the start-up firm's assets will be held in custody by Fidelity Institutional Wealth Services, according to the report.