October 10, 2019
JOHANNES EISELE/AFP/Getty Images
JPMorgan is continuing to flex its legal muscle against former brokers in bank branches who leave for competitors, filing on Wednesday for a temporary restraining order and preliminary injunction against an Indiana advisor who joined Raymond James Financial’s employee channel on September 13.
Erik Weiss, who worked at JPMorgan brokerage units for more than a decade and was overseeing $197 million in client assets, engaged in “aggressive solicitation” of clients by phone and email in violation of his employment contract and privacy laws, J.P. Morgan Securities said in a filing in U.S. District Court for the Southern District of Indiana. He successfully transitioned around 40 households with $27 million, it said.
The filing, which also accuses Weiss of making disparaging remarks about JPMorgans “inferior” product offerings, comes less than a week after a JPMorgan Chase private client advisor in Florida agreed to a preliminary injunction prohibiting him from further soliciting former clients pending resolution of a parallel arbitration claim by the bank.
“They are sending a message to others at JPMorgan that if you leave, potentially we could file for an injunction against you, too,” said Thomas B. Lewis, a securities employment lawyer at Stevens & Lee in New Jersey, who is not involved in the two cases.
Other firms, too, have stepped up litigation in the early days following a broker departure, he said, adopting strategies that were once common among large broker-dealers such as Merrill Lynch. The wirehouses, with an eye on their escalating legal expenses, stopped reflexively seeking TROs after joining the Protocol for Broker Recruiting more than a decade ago, but Morgan Stanley has been selectively litigating since it pulled out of the Protocol in late 2017.
Weiss, who now works at a Raymond James & Associates branch in Greenwood, Indiana, did not return a request for comment. He began his registered rep career at Charles Schwab Inc. predecessor Equity Services Inc. in 2005 and joined a branch-based brokerage unit of JPMorgan Chase in 2007, according to his BrokerCheck record.
“Erik continued expanding his financial career by joining Raymond James, a firm he admires for its client-first culture and breadth of resources,” he says in a biographical statement on a RayJay website.
In its filing, J.P. Morgan Securities said at least three clients who worked with Weiss reported that they felt “‘pressured’” to transition their accounts to Raymond James. J.P. Morgan concurrently filed a Finra arbitration claim against Weiss.
JP Morgan also said that its bank-branch-based brokers are fed leads on bank customers rather than developing client books on their own as is common at traditional firms—an argument about “ownership” of client data that discount brokerage firms Charles Schwab & Co. and Fidelity Investments have recently adopted in a spate of cases they have brought.
Last week, two Morgan Stanley brokers who joined Wells Fargo Advisors in Florida agreed to a temporary restraining order, as did a former Edward Jones broker who jumped to Wells Fargo Advisors.
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