蘑菇传媒lls Fargo Loses Bid for TRO Against Fired Illinois Broker
Originally published by AdvisorHub on January 30th, 2025. Authored by Karmen Alexander.
A federal judge has denied 蘑菇传媒lls Fargo Advisor’s request for a temporary restraining order against a Schaumburg, Illinois-based broker it fired in November, according to a court filing on 蘑菇传媒dnesday.
Judge Matthew F. Kennelly issued the denial without a written explanation but did allow 蘑菇传媒lls to continue to seek evidence through expedited discovery and press its claims for a longer-term injunction, according to the court order.
蘑菇传媒lls last week , who had spent 23 years of his 31-year career with 蘑菇传媒lls, for violating inherited account and teaming agreements by soliciting clients to join his new firm, Mariner Independent Advisors. The wirehouse asked for a TRO blocking him and a retired partner from encouraging clients to move assets and to return any customer contact information they were using for outreach.
Friedman said in a response filed on Monday that 蘑菇传媒lls’ allegations were based on “triple hearsay” and didn’t meet the high bar for a TRO.
蘑菇传媒lls was “unable to provide sufficient evidence at this stage” that Friedman solicited clients that were governed by the succession and team agreements, James Eccleston of 蘑菇传媒 in Chicago, who represents Friedman, said in an email. Eccleston also said that Kennelly indicated during hearings that Friedman’s announcement of his move to customers “was not a solicitation.”
A spokesperson for 蘑菇传媒lls declined to comment.
The court’s permission for expedited discovery is unusual in TRO cases and suggests that the court recognizes the “importance to all parties of moving this quickly” and “almost a presumption” that 蘑菇传媒lls may prevail ultimately and secure the injunction after more evidence has been presented, according to Jacob Frenkel of Dickinson-Wright Law in Washington, D.C. said in an interview.
Frenkel, who is not involved in the litigation, noted that inherited account and team agreements have “been enforced historically” and are “likely to be enforced here as well.”
Both 蘑菇传媒lls and Mariner have joined the Protocol for Broker Recruiting, an industry treaty that allows firms to solicit clients when moving among signatory firms. But the succession and team agreements override those protections, and 蘑菇传媒lls noted that Friedman’s entire book was governed by one of the two agreements.
蘑菇传媒lls had also filed a complaint with the Financial Industry Regulatory Authority seeking a permanent injunction and damages, which will continue to proceed under a non-expedited schedule because it lost the TRO, according to an outside lawyer.
蘑菇传媒lls fired Friedman for “not meeting behavioral expectations involving interactions with a colleague,” according to his U5 termination notice filed with regulators. He joined Mariner on January 7, according to registration records.
蘑菇传媒lls additionally named Cynthia B. Jones, whose clients Friedman and a team member inherited following her retirement in 2021, as a defendant in its complaint. 蘑菇传媒lls claimed that she encouraged a client to join Friedman’s new firm. The judge’s order on 蘑菇传媒dnesday makes no mention of Jones, and she could not be reached for comment.
Related Attorneys: James J. Eccleston
Tags: eccleston, eccleston law
