Edward Jones loses round in court against former broker who defected to Ameriprise

Jones has seen $18 million of client assets move to a rival brokerage firm

Jun 14, 2019 @ 1:53 pm

By Bruce Kelly

Edward D. Jones & Co. on Thursday suffered a setback in its fight to recoup client assets from a former broker who bolted to rival Amerprise Financial Services earlier this year.

A state judge denied Jones' request for a temporary restraining order against James P. Farrell, an eight-year veteran of the firm before he left in March for a job in Ameriprise's office in Paramus, N.J.

At the same time it filed a complaint in State Superior Court in April, Jones filed a complaint against Mr. Farrell with the arbitration arm of the Financial Industry Regulatory Authority Inc., which oversees such industry disputes.

In its court complaint, Jones alleged a number of charges, including: breach of contract, misappropriation of trade secrets, breach of fiduciary duty and other charges typical in such trade fights over clients when a broker leaves one employer for another. The broker took Jones' confidential and proprietary client records and information, according to the complaint, and also made phone calls and visits to clients to solicit them to open accounts at his new firm.

The firm had lost at least $18 million in client assets since Mr. Farrell resigned, according to the complaint.

Mr. Farrell's attorney, James Heavey, later replied in a court memo that, Jones' allegations had no basis in fact.

"Although Edward Jones seeks the extraordinary relief of an injunction and temporary restraints to stop Mr. Farrell from conducting business at his new firm, Edward Jones has not submitted a shred of credible evidence to this court to support its allegations of misappropriation and solicitation," he state in the memo.

On Thursday, Judge Edward A. Jerejian denied and dismissed Jones' request for a temporary restraining order.

"We believe the judge came to the right conclusion, and we're pleased that he once again sided with the adviser," said Ameriprise spokeswoman Kathleen McClung.

A spokesman for Edward Jones, John Boul, said the firm would continue to pursue the matter in Finra arbitration.

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