Ameriprise has prevailed in one of its many skirmishes over rival LPL Financial's recruiting methods, winning barely over $200,000 arbitration award over an advisor duo that left the firm nearly two years ago.
Three arbitrators on a Financial Industry Regulatory Authority panel this week ordered LPL and a father-son advisor team consisting of Mitchell and Wesley McCann to pay $200,600, plus interest, over claims that they had violated contracts and industry recruiting standards. Shortly after the McCanns left Ameriprise in April 2024, Ameriprise sued them in federal court in Detroit, in part over allegations that they had taken confidential documents "in the dark of night, after business hours, and on weekends."
The judge overseeing the case issued
Although in Ameriprise's favor, the award fell far short of what the firm had sought, noted the McCanns' lawyer, Scott Matasar of MatasarJacobs in Cleveland.
The panel turned down Ameriprise's requests for punitive damages and injunctions requiring the McCanns and LPL to return any documents they may have taken and barring them from reaching out to former clients.
"After nearly two years of litigation, the panel ultimately awarded Ameriprise a tiny portion of what it originally sought and denied the majority of its claims for relief," Matasar said in a statement. "The McCanns are pleased to have this matter resolved and remain focused on continuing to provide their clients with exceptional service and advice."
Ameriprise declined to comment Thursday on the case's resolution. LPL Financial did not return a request for comment.
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Arbitration awards not the usual resolution in recruiting disputes
Richard Chen, a legal advocate for advisors and the founder of New York-based Brightstar Law Group, said it's unusual for a recruiting dispute to result in an arbitration decision. Usually before appearing before arbitrators, the parties will reach a settlement.
That's partly to save money — the legal costs of arbitration can easily exceed $100,000.
"Also, it doesn't look great," Chen said. "And it's a lot of time wasted, generally, unless you're talking about a very big advisor with lots of clients, or it's a firm that's trying to make an example of someone."
Sharron Ash, the chief litigation counsel at the Hamburger Law Firm, said either side of the dispute could look at the arbitration panel's award and claim a win. She agreed that although Ameriprise ostensibly prevailed, it obtained very little economic recovery and none of the forms of relief it was seeking.
"The real loss here, and the harm in this type of litigation, is that clients are delayed or maybe even prevented from working with their advisor," she said.
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What the Broker Protocol does, and doesn't, allow
Before leaving Ameriprise, the McCanns had managed roughly $250 million in the Detroit suburb of Bloomfield Hills, Michigan. Ameriprise's initial court complaint stated they together managed money for nearly 322 households and produced more than $1.8 million in revenue in their last year at Ameriprise.
As is common in arbitration decisions, the panel hearing the McCanns' case did not go into the reasons for its final award. Ameriprise accused the duo of violating not only their contracts but also the Protocol for Broker Recruiting.
The Broker Protocol is a voluntary pact intended to deter lawsuits between firms over recruiting deals. It specifies that advisors can take five types of client information — names, addresses, phone numbers, e-mail addresses and account titles — without fear of legal consequences. Both Ameriprise and LPL Financial belong to the protocol.
Ameriprise's suit against the McCanns accused them of violating the Broker Protocol in part by reaching out to clients before they had departed for LPL and by taking documents not covered by the protocol. As evidence of allegedly untoward activity, Ameriprise produced screenshots from security footage showing the McCanns removing boxes of documents in the weeks and days leading up to their departure. Many of the images were captured in the evening, after their office had closed.
The suit accused the duo of printing 687 pages of documents containing customer information such as names, account numbers and routing numbers. It also said the McCanns sent themselves 14 emails listing similar data and mass mailing letters to former clients.
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A history of recruiting disputes between Ameriprise, LPL Financial
The arbitration panel's award against the McCanns and LPL consists of:
- $60,500 in compensatory damages, plus interest, to be paid by the McCanns over alleged breach of contract;
- $17,000 in compensatory damages, plus interest, to be paid by LPL over alleged tortious interference;
- $120,000 in attorney's fees to be paid by Wesley McCann;
- $600 LPL must pay to cover a filing fee; and
- $2,500 the McCanns must to pay to cover an "injunctive relief" surcharge imposed by FINRA rules
At the same time, the arbitration panel rejected Ameriprise's request for permanent injunctions requiring the McCanns and LPL to return any documents they may have taken and barring them from reaching out to former clients. The panel also turned down requests for punitive and treble damages.
Ameriprise's legal battle over the McCanns is one of several ongoing recruiting disputes it has with LPL Financial. In November 2024, it
Ameriprise also filed a wide-ranging lawsuit in July 2024 accusing LPL of a "widespread pattern and practice of harvesting and misappropriating Ameriprise's private, confidential client information and trade secrets … in connection with its unfair competition within the financial industry." The firms initially resolved that dispute with an agreement calling for 30 advisors recruited by LPL to turn over their personal devices to be searched for improperly retained client information by a third-party forensic examiner.
Some of the advisors later objected to the deal, arguing they had never been consulted on it. The Ninth Circuit Court of Appeals in January
