LPL Financial secures a legal victory in one recruiting dispute against Ameriprise while downplaying a setback in another case. A federal court in Arizona denies Ameriprises request for a temporary restraining order against three former advisors who joined LPL. Ameriprise alleges the advisors improperly solicited former clients and took confidential information.
This case is one of several Ameriprise has brought against LPL over departing advisors. LPL describes these lawsuits as part of a “deeply misguided” campaign of “serial litigation.” According to LPL, Ameriprise has initiated eight cases related to LPL’s recruiting practices.
The dispute now moves to an arbitration panel under brokerage industry self-regulator Finra.
“We look forward to presenting the overwhelming evidence to a panel of experienced Finra arbitrators,” an Ameriprise spokeswoman states. “Importantly, we’ve prevailed in several other cases regarding the egregious recruiting practices by LPL and its advisors that put client privacy at risk.”
LPL expresses satisfaction with the ruling, emphasizing that the court saw through Ameriprise’s claims.
“It is evident from the ruling that the court recognized the baseless nature of Ameriprise’s allegations and rejected its attempts to claim ownership of advisors’ books,” LPL states.
Meanwhile, in a separate case in Washington, a federal judge upholds an injunction against LPL and a former Ameriprise advisor. The ruling follows a Finra panel’s preliminary finding that Ameriprise is likely to succeed in proving the advisor improperly solicited clients and took confidential information upon leaving the firm. Finra arbitrators will make a final determination in the case, but for now, the injunction stands.
LPL downplays the ruling’s impact, noting that it aligns with the court’s earlier decision granting Ameriprise a temporary restraining order against LPL and the advisor, Douglas Kenoyer.
“This decision was expected,” an LPL spokeswoman states. “It is consistent with the court’s previous ruling from October and made no findings against LPL.”
Ameriprise offers a different perspective, arguing that the ruling supports its claims regarding LPL’s recruitment practices.
“The court’s decision further validates our concerns that LPL’s recruiting tactics put client information and advisors at risk,” an Ameriprise spokeswoman says.
