JPMorgan accused a former bank branch advisor who left for Ameriprise of using confidential client information to solicit clients at his new job.
J.P. Morgan Securities requested a temporary restraining order against Patrick Durham in Florida federal court this week, seeking to stop him from contacting former clients while FINRA arbitration plays out.
“Unless (Durham’s) misconduct is immediately restrained and enjoined, other competitors of JPMorgan will be encouraged to engage in the same kind of improper behavior with complete impunity, the result of which will inflict severe and permanent damages on JPMorgan,” the complaint read.
But Durham accused JPMorgan of filing a “frivolous witch hunt of a lawsuit,” claiming he hadn’t illegally solicited any of his former clients at the bank.
“(JPMorgan) asked this court to further disrupt not only Mr. Durham’s livelihood, but also the affirmative choices made by his clients to rely upon the financial advisor of their own choosing,” Durham’s response read.
SEC records show Durham first registered in the industry in 2000 at Citigroup, where he stayed for eight years. After stints at Morgan Stanley, Wells Fargo and RBC, Durham joined JPMorgan in 2020.
According to the complaint, Durham operated as a private client advisor out of a JPMorgan branch in Boca Raton, Fla., introducing himself to existing bank clients seeking wealth management support to build his book of business.
Durham allegedly managed about 236 households and $250 million in client assets. JPMorgan claimed the firm didn’t expect Durham to seek out clients independently. Durham also signed client confidentiality agreements and was prohibited from soliciting former JPMorgan clients for one year after leaving the firm.
According to JPMorgan, Durham resigned on April 25 and immediately started work at Ameriprise as a financial advisor.
However, JPMorgan claims Durham is soliciting clients to move their business to Ameriprise, alleging it knows of at least 10 Durham has contacted.
One client said they’d received “several” calls from Durham claiming he could do things at Ameriprise that he could not do at JPMorgan. According to the complaint, the client described the calls as “harassment.” JPMorgan also said Durham took some client information (including personal cell phone numbers) to Ameriprise and is using it to solicit them.
JPMorgan alleges that about four households with assets totaling around $3.5 million have opted to join Durham at Ameriprise.
But in his response, Durham replied that merely announcing to clients a change in roles does not amount to solicitation, and that in other cases, JPMorgan attorneys argued that advisors are free to tell clients about a change in employment status. Durham argued that advisors in fact must inform their clients of job changes to fulfill their fiduciary duties.
“(JPMorgan) constantly hires new financial advisors from competing broker/dealers, and it undoubtedly encourages these new hires to engage in the identical announcement strategy it now protests against,” Durham’s filing read.
According to a declaration Durham filed with the court, the only information he had was client names, addresses and phone numbers, which he said he made using his own memory and public records information. Durham claimed he didn’t take confidential information (including client lists, holding pages or computer data), but made a list of names “he easily recalled after years of servicing his clients and building strong relationships.”
An Ameriprise spokesperson noted that while the firm is not named in the suit, the “case is without merit and based on flimsy evidence.”
“We look forward to having the full facts before the court,” the spokesperson said.
A hearing in the case is scheduled to take place Friday.
Ameriprise is currently locked in several similar lawsuits with LPL Financial, although Ameriprise has been the firm seeking restraining orders. It alleges its former advisors solicited former clients after moving to the IBD (LPL has continued to claim the lawsuits are frivolous).
In recent months, the conflict grew more heated when LPL argued Ameriprise had sent LPL clients “misleading” data breach notifications (LPL agreed to dismiss the lawsuit last week). Several former Ameriprise advisors are also trying to pause a court decision allowing their personal devices to be searched for evidence of confidential Ameriprise client information.
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