I was recently interviewed by Fundfire, a financial services industry on-line publication, regarding J.P. Morgan obtaining a temporary restraining order as it pursues an arbitration case against seven advisors who left to launch an independent shop with LPL Financial. This is yet another case involving the protections of the industry’s agreement called the Protocol for Broker Recruiting.
On October 27, seven private bank advisors left and registered with LPL, launching Gulf Point Advisors, which focuses on working with family offices.… Read More
When it comes to financial advisers switching firms, the old adage – loose lips sink ships – holds true.
When a financial adviser is plotting to jump ship, the temptation to tell clients is often strong. Stifle it, and stay mum.
New firms often don’t appreciate being drawn into lawsuits or arbitration over solicitation. Clients don’t like it, either.
“You’re also potentially subjecting your clients to be asked to testify as to the nature and scope of your communications,” said David Harmon, an employment attorney and partner at Norris McLaughlin & Marcus in New York.
In the arena of post-employment non-solicitation/confidentiality litigation, employers and employees should be aware of a November 15, 2012 decision by the First Department of the Appellate Division of the Supreme Court of New York in AllianceBernstein LP v. Atha. In this case, Atha, a financial analyst who left AllianceBernstein (AB) for Morgan Stanley, was sued by AB, claiming he violated the confidentiality provisions of his employment agreement by taking confidential information, including client lists, to Morgan Stanley for the purpose of soliciting those clients. … Read More