Charles Schwab has filed a lawsuit against a former financial advisor, Roberto Ortega, accusing him of breaching a non solicitation agreement after departing from the company earlier this year to join another wealth management firm.
According to the lawsuit, Ortega managed high-net-worth clients with assets exceeding $1.5 billion during his tenure at Schwab. He left the company in July and registered with Nhabla, a registered investment advisory (RIA) firm, in October. Nhabla, a two-person firm, manages just $108,660 in assets, as reported in its latest Form ADV filing.
Schwab alleges that Ortega accessed client records before resigning and is now using the company’s trade secrets to unlawfully solicit clients. The lawsuit states Ortega “has used, and is presently using, Schwab’s misappropriated trade secrets in furtherance of wrongful solicitation of its clients.” Schwab is seeking a federal injunction to prevent Ortega from contacting clients and to compel him to return any client data he allegedly took. The firm has also filed an arbitration claim against him.
A Schwab spokesperson commented, “Protecting client information and maintaining confidentiality are critical priorities for Schwab. We expect all representatives to adhere to their contractual and legal obligations. We will enforce our rights and hold Mr. Ortega accountable for breaching those obligations and taking confidential information.”
Ortega has not responded to inquiries sent via phone or social media platforms.
Disputes over nonsolicitation agreements are frequent in the financial services industry. The Broker Protocol, a widely recognized industry agreement, allows advisors moving between member firms to retain basic client contact information. However, Schwab is not a signatory of the protocol. All Schwab representatives must sign confidentiality and nonsolicitation agreements, which prohibit them from taking or using client information post-employment.
Schwab’s lawsuit asserts that Ortega signed such an agreement on January 19, 2022. He joined Schwab that year after leaving Fidelity, where he worked from 2015 to 2022. The agreement obligated Ortega to provide four weeks’ notice before resigning and barred him from taking any client information, including client identities, contact details, or financial data.
The lawsuit further alleges that Schwab’s review of Ortega’s system activity before his resignation revealed questionable behavior. On May 6 and May 7, Ortega reportedly accessed 1,689 client-overview screens in Schwab’s proprietary database in rapid succession “without any apparent legitimate business reason.” Similar activity reportedly occurred over the following weeks.
Monitoring advisors’ digital activity has become a common tactic in nonsolicitation lawsuits. Other financial firms have cited similar forensic evidence to support their cases for injunctions against former advisors accused of violating nonsolicitation agreements.
Schwab’s legal complaint emphasizes that the firm provides extensive support, training, and access to a pool of existing clients to its advisors. The firm views the protection of client information as a critical element of its operations and expects all employees to uphold their contractual commitments.
