J.P. Morgan Securities filed a complaint and request for a temporary restraining order on Tuesday, seeking to stop one of the firm's former brokers from doing business with the firm's clients.
Ryan C. May resigned from J.P. Morgan in Illinois in December and began working at Amerprise Financial Services Inc.,
according to his BrokerCheck report.
Both J.P. Morgan Securities and
Ameriprise Financial Services remain in the broker protocol for recruiting agreement, which allows a broker to carry limited client information with him when he moves to a new firm, provided he follows the guidelines laid out in the agreement.
The financial advice industry has been closely watching firms filing TROs against brokers since last fall.
That's when two wirehouses, Morgan Stanley and
UBS Wealth Management Americas, announced they were pulling our of the broker protocol, stoking advisers' fears at those firms that they would be hit with lawsuits if they changed employers.
The current attention to the broker protocol and TROs involving brokers who leave one firm for another also underscores a central issue in the financial advice industry. Who controls the client: the firm or the adviser?
Mr. May worked at J.P. Morgan Securities and a predecessor firm for almost 10 years before resigning in December.
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's "conduct constitutes a breach of his employment agreements," which contain non-solicitation provisions, as well as J.P. Morgan's code of conduct and a violation of common-law obligations to J.P. Morgan, the complaint alleges.
According to J.P. Morgan Securities' complaint, Mr. May "is aggressively soliciting J.P. Morgan clients to move their accounts" to him at Ameriprise. J.P. Morgan "has learned that [Mr. May] is soliciting clients via emails, text messages and phone calls, including calls to clients on their personal cell phones, seeking to induce such clients to transfer their accounts" from J.P. Morgan to Ameriprise.
Mr. May did not return a call for comment. A spokeswoman for J.P. Morgan Securities, Kaitlin Finnerty, also did not return a call for comment.
Mr. May in March sent an email to a J.P. Morgan client that stated, in part, "I hope all is well. Anyways, I know I'm not your guy...yet! but I still want to help."
In another email to a different client from last month, Mr. May wrote: "I know you said you're staying where you are, but I thought it might be worth a conversation about what's going to happen with the bonds in your portfolio when interest rates start to rise."
"In addition, to aid his solicitation efforts, [Mr. May] is bad-mouthing the current J.P. Morgan advisor who was assigned the client's accounts upon [Mr. May's] departure from J.P. Morgan by stating that he knows the client's wishes more than the current advisor," according to the complaint.
