October 9, 2019
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The legal battles over client solicitation continue to multiply as a former JPMorgan Chase bank-based broker in Florida agreed to an injunction blocking him from contacting clients while Fidelity Investments on the same day sought a similar order against another broker in the state.
Pedro Lopez-Villari, who moved to UBS Wealth Management USA in Aventura, Florida, reached a stipulated agreement to not solicit clients pending the outcome of a parallel Financial Industry Regulatory Authority arbitration case for damages and a permanent injunction, according to an order approved by a judge on October 4.
Separately, Fidelity Brokerage Services on the same day filed in the same district court a request for a preliminary injunction against broker Anthony Guadagnino, who moved to Morgan Stanley, in Palm Beach Gardens.
Fidelity’s case brings similar accusations over taking of client contact information and breach-of-contract, but unlike JPMorgan’s case, which does not name UBS as a party, Fidelity listed Morgan Stanley as a defendant and claims it provided “encouragement and assistance” to the broker.
Morgan Stanley and Guadagnino responded on Wednesday with a motion to dismiss the case. All Fidelity’s arguments must be brought in arbitration, and it is not entitled to preliminary injunctive relief in court under the terms of its employment agreements, according to the motion filed by Michael S. Taaffe of Shumaker, Loop & Kendrick in Sarasota, Florida.
Both cases reflect what lawyers have said is an increasingly litigious environment for departing brokers. The lawsuits have come from a variety of firms, including Morgan Stanley, which has filed over a dozen requests for temporary restraining orders since leaving the Protocol for Broker Recruiting almost two years ago, as well as discount brokers like Charles Schwab and Fidelity Investments in addition to registered investment advisory firms.
Last week, a pair of Morgan Stanley brokers who joined Wells Fargo Advisors in Florida and a solo practitioner who moved to Wells in Minnesota from Edward Jones each stipulated to temporary restraining orders in separate cases brought by their former employers.
In the cases from Fidelity and JPMorgan, both firms allege that their injunction requests are unique because they feed accounts to bank-based brokers or in Fidelity’s case, refer leads from self-directed customers, 401(k) clients and other sources.
Lopez-Villari agreed to the order without admitting or denying JPMorgan’s allegations that in the weeks after leaving on August 30, he had transitioned around $13 million of the $81 million in assets he had managed for 100 households thanks in part to offers of lower fees and disparaging remarks about the bank.
Lopez-Villari declined to comment on the case, as did a spokesman for UBS. Lopez-Villari’s lawyer, Victor Petrescu with Levine, Kellogg, Lehman, Schneider and Grossman in Miami, did not return a call for comment.
The order allows Lopez-Villari, who started his career in 2005 at Ameriprise Financial Services and had been with JPMorgan since 2014, to respond to in-bound contacts from his former clients, but requires him to maintain a log of all such inquiries.
In Palm Beach, Guadagnino, who resigned from Fidelity on June 14, allegedly sent unsolicited mailings with personal letters and instructions on how to transfer accounts to at last 10 customers after joining Morgan Stanley, according to Fidelity’s complaint.
Fidelity, which said it believes that he also took a list of client contact information, accuses Morgan Stanley of encouraging the client outreach and “providing him with the facilities and resources” to solicit them, according to the complaint, which did not discuss the size of Guadagnino’s practice.
Guadagnino, who started his career at Northwestern Mutual in 2008 and moved to Fidelity in 2014, according to BrokerCheck, did not return a call for comment. A spokeswoman for Morgan Stanley declined to comment on the complaint, which was earlier reported by “FA IQ.”
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