Ameriprise Secures Restraining Order Against LPL in Client-Solicitation Dispute

Ameriprise Financial recently achieved a significant legal victory against LPL Financial concerning a client solicitation dispute. A federal judge granted Ameriprise's request for a temporary restraining order, which addresses actions taken by an advisor team that transitioned from Ameriprise to LPL.

Judge Brandy R. McMillion's July 1 ruling permits LPL to continue servicing clients already under their management. An Ameriprise spokeswoman expressed satisfaction with the decision, stating, "The facts of this case were clear. These advisors and LPL violated the protocol for broker recruiting and other industry standards. We’re pleased the judge agreed."

The conflict began when advisors Mitchell R. McCann and his son, Wesley McCann, left Ameriprise on April 22 to join LPL in Bloomfield Hills, Mich. They previously managed approximately $240 million in assets at Ameriprise, as highlighted in LPL's May hiring announcement.

On June 4, Ameriprise filed a lawsuit against LPL and the McCanns in federal court in Detroit. The lawsuit alleges that the advisors breached their contracts by taking confidential information and soliciting clients to transfer assets to LPL before their departure. Ameriprise also claims that LPL encouraged these violations.

According to Ameriprise, the McCanns printed 687 pages of documents containing sensitive information, including client details, account numbers, and routing numbers, which were unauthorized. Additionally, they allegedly removed boxes of confidential documents from Ameriprise.

While the Broker Protocol allows advisors to take basic client contact information when switching firms, it does not permit presolicitation or the retention of comprehensive client documentation, as stated in Ameriprise's complaint. Ameriprise has also initiated a Finra arbitration complaint against the advisors.

Last month, the McCanns agreed not to solicit their former Ameriprise clients and to return any confidential documents they possessed. They also committed to providing Ameriprise with a list of individuals who received mass-mailing letters around April 15.

LPL and the McCanns have remained silent on the matter, declining to comment. LPL did attempt to dismiss Ameriprise's restraining order request, arguing that Ameriprise's actions were an attempt to intimidate other advisors considering a move to rival firms and to stifle competition in the financial services industry.

LPL Financial, one of the nation’s leading wealth management companies, actively recruits financial advisors and reported $1.44 trillion in assets with nearly 23,000 advisors at the end of the first quarter. In comparison, Ameriprise managed $1.4 trillion in assets and had over 10,000 advisors.


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