J.P. Morgan Files Suit Against Two Advisors Who Departed For Merrill Lynch
J.P. Morgan has asked a New York state court to issue a temporary restraining order (TRO) barring two of its former advisors from soliciting their former clients.
The two New York City-based advisors, Stephen DePalma and Kenneth Clough, allegedly misappropriated proprietary client information and violated one-year non-solicitation provisions included in their employment agreements, according to J.P. Morgan’s complaint. J.P. Morgan alleges that the two advisors, who managed nearly $407 million in assets for at least 500 clients, already had transferred three clients with $2.5 million – less than 1% – to Merrill Lynch. J.P. Morgan further alleges that it maintains a right to the advisors’ former clients because the “vast majority” either were pre-existing clients at J.P. Morgan or referred from one of its branches.
Merrill Lynch offered the two advisors more than $1 million in “financial inducements” to join the firm, according to J.P. Morgan’s complaint. The complaint discusses reports from unidentified clients who informed J.P. Morgan that the advisors called them on their personal cell phones to convince the clients to transfer their business to Merrill Lynch. According to the complaint, the advisors’ communications with former clients went further than “simply announcing” their job change.
蘑菇传媒 LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory and disciplinary matters.
