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HomeWealth ManagementJPMorgan Sues Arizona Advisors For Allegedly Soliciting Purchasers

JPMorgan Sues Arizona Advisors For Allegedly Soliciting Purchasers

J.P. Morgan Securities filed a set of lawsuits in Arizona federal court docket to cease plenty of former advisors for allegedly breaking nonsolicitation agreements after resigning and shifting to new roles at Ameriprise and Wells Fargo.

Based on the grievance looking for a brief restraining order, Brian Armstrong and Samira Arikat “engaged in a coordinated resignation” from J.P. Morgan in mid-June, instantly becoming a member of Wells Fargo and working out an workplace in Scottsdale, Ariz. 

The duo (who’re married) had beforehand labored as a workforce of personal consumer advisors for J.P. Morgan out of two Scottsdale financial institution department workplaces, with Armstrong becoming a member of in 2007 and Arikat coming onboard in 2012. 

At J.P. Morgan, Armstrong and Arikat labored with Catherine Esparza and Michael G. Rosson Jr., two personal consumer bankers, in addition to JPMorgan Personal Shopper Funding Affiliate Beth J. Michele. All three resigned to affix Wells Fargo the identical day as Armstrong and Arikat, in keeping with the go well with.

Esparza and Rosson labored on the financial institution aspect of the enterprise, however J.P. Morgan argued they needed to depart with Arikat as a result of that they had “frequent contact” with a lot of her shoppers. Michele had comparable contact with a lot of Armstrong’s shoppers, in keeping with the go well with.

Based on J.P. Morgan, the advisors had agreements prohibiting them from soliciting JPMorgan shoppers and staff for a yr after leaving, whereas adhering to confidentiality agreements regarding consumer data. However J.P. Morgan argued the previous staff had been “aggressively soliciting” shoppers to affix them at Wells Fargo and calling them on private cellular phone numbers. 

Some calls got here earlier than the duo even resigned, requesting conferences with shoppers, and telling them they might supply “decrease charges, in addition to totally different and superior companies and merchandise,” at Wells Fargo. In a single case, a consumer mentioned Armstrong advised her Wells had a “higher platform” for prosperous shoppers, saying she felt “uncomfortable” when Armstrong solicited her as a result of he was very “assertive” and “aggressive.”

Moreover, within the days previous to their resignations, Armstrong and Arikat accessed nearly 100 consumer information on J.P. Morgan’s methods, in keeping with the go well with. On June 14 (the day earlier than they resigned), the advisors accessed 44 consumer accounts, in lots of circumstances just for one or two minutes. On the day earlier than, they accessed 36 accounts for equally quick durations of time. These screens included consumer data, together with names, e-mail addresses, telephone numbers and account balances, and J.P. Morgan believed the duo introduced this data with them to Wells Fargo.

“As Armstrong and Arikat had been mere days away from resigning and becoming a member of Wells Fargo, there was no professional enterprise motive for Armstrong and Arikat to entry and think about such a big quantity of consumer data,” the grievance learn.

Up to now, about 9 J.P. Morgan shoppers have mentioned Armstrong or Arikat solicited them, and about 80 consumer households that had been serviced by the advisors throughout their time at J.P. Morgan have moved to Wells Fargo, with greater than $95 million in property.

“Except defendants’ conduct is instantly enjoined, defendants will stay emboldened and can proceed to have interaction of their rampant misconduct, and J.P. Morgan’s different staff might be inspired to have interaction in the identical improper conduct,” the grievance learn.

When reached for remark, Wells Fargo Advisors VP Jackie Knolhoff mentioned the agency was “happy to welcome Samira Arikat and Brian Armstrong to Wells Fargo Advisors.”

J.P. Morgan lobbed comparable accusations in a lawsuit calling for a brief restraining order in opposition to Arizona dealer Seth Chamberlain, who it mentioned broke a nonsolicitation settlement after resigning from J.P. Morgan Securities to maneuver to Ameriprise. 

Based on the order, Chamberlain was a personal consumer advisor primarily based out of Mesa, Ariz., and had been with J.P. Morgan or its predecessors since 2005 earlier than resigning on Could 27, 2022. Nevertheless, J.P. Morgan realized from greater than a dozen shoppers that Chamberlain had referred to as them wanting to debate his transfer to Ameriprise, and in some cases instantly requested them to maneuver their enterprise with him to the brand new agency.

In a single occasion, Chamberlain advised a consumer he might supply a reduction to maneuver to Ameriprise, whereas in one other case, the consumer advised J.P. Morgan that at Ameriprise, Chamberlain promised he might now promote “actual merchandise” that J.P. Morgan lacked (each shoppers in the end transferred their accounts to Amerprise, in keeping with the go well with).

“A number of J.P. Morgan shoppers have reported to J.P. Morgan that (Chamberlain’s) ‘pitch’ consists of touting extra ‘flexibility’ regarding particular person inventory trades (which is senseless), and “higher merchandise” at Ameriprise to satisfy their wants,” the order learn.

Like Armstrong and Arikat, J.P. Morgan additionally accused Chamberlain of taking confidential consumer data, together with cellular phone numbers, with a purpose to solicit shoppers when at Ameriprise. However J.P. Morgan fearful the efforts had been proving profitable; at this level, 66 shoppers with property round $53 million had moved their accounts to Ameriprise and Chamberlain. (Amerirprise mentioned it was not ready to remark because it was not a celebration within the go well with).

Final week, J.P. Morgan filed go well with in Michigan federal court docket accusing a former dealer from violating a nonsolicitation settlement, attracting greater than $20 million in enterprise to affix him at Stifel.



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