J.P. Morgan, ex-broker move dispute over clients from court to Finra arbitration

Firm had filed a lawsuit against Ryan C. May, alleging he was soliciting old clients in violation of his employment agreement

Apr 13, 2018 @ 5:00 pm

By Bruce Kelly

J.P. Morgan Securities and a former broker the firm sued for soliciting his old clients have agreed to move their dispute to an arbitration panel at the Financial Industry Regulatory Authority Inc.

On Tuesday, J.P. Morgan Securities filed a complaint and request for a temporary restraining order seeking to stop its former broker, Ryan C. May, from doing business with the firm's clients. The two sides signed a settlement Friday in which the firm dropped that request and both parties agreed to arbitration.

In the original complaint, J.P. Morgan Securities alleged that Mr. May, who is based in Illinois, was "aggressively soliciting J.P. Morgan clients to move their accounts" to him at his new firm, Ameriprise Financial Services Inc. Mr. May moved to Ameriprise in December after nearly 10 years at J.P. Morgan and a predecessor firm.

As part of the settlement, Mr. May is prohibited from soliciting J.P. Morgan clients. However, he can respond to inquiries from J.P. Morgan clients and can work with clients who transfer accounts to Ameriprise. As part of the agreement, he needs to keep a log of client inquiries and return to J.P. Morgan all records, documents and information about clients he had before he resigned.

About two dozen former J.P. Morgan clients, with more than $25 million in assets, have moved their accounts to Mr. May at Ameriprise, according to the complaint, which was filed in U.S. District Court in the Northern Division of Illinois. He had clients with a total of almost $160 million in assets "assigned" to him at J.P. Morgan, according to the complaint.

Mr. May said he could not comment on the matter because it was still ongoing. A spokeswoman for J.P. Morgan Securities, Elizabeth Seymour, also declined to comment.

"If the damage is already done and the assets are out the door, it's sometimes better for the firm to go to Finra arbitration," said James Heavey, a partner at Barton LLP. "And the firm gets what it wants, which is stopping the broker from calling clients."

Ameriprise and J.P. Morgan Securities, at least for some of its brokers, remain in the broker protocol for recruiting agreement, which allows brokers to carry limited client information with them when they move to a new firm, provided they follow the guidelines laid out in the protocol agreement.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Geoffrey Brown: What's top of mind at NAPFA?

NAPFA is looking ahead at the rest of 2018 and has a broad agenda that includes improving diversity in the advice industry. What's next? Geoffrey Brown offers his insights.

Latest news & opinion

10 fastest-growing IBDs

These independent broker-dealers saw the biggest percentage gains in their revenue in 2017.

The unique nature of working with celebrity clients

Athletes and entertainers are just like everyone else — aside from complex tax issues, a lack of financial savvy and a need for prenups

Top 10 IBDs ranked by revenue

These independent broker dealers generated the most revenues in 2017.

8 podcasts advisers listen to when they aren't working

Listening to podcasts for the fun of it.

UBS continues to cut loans to recruits, while increasing compensation to brokers

The wirehouse reduced recruitment loans 20% and increased bonus loans 68% in the first quarter.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print