Edward Jones sues Ameriprise advisor. At stake? $70M in client assets
Edward Jones is suing an ex-advisor, accusing him of violating a non-solicitation agreement with, the firm alleges, the active help of his new employer, Ameriprise.
Virginia-based Samuel Ed Clyburn Jr. managed $70 million while working for Edward Jones in Wytheville, a town of just 8,000 people.
Clyburn left his old firm June 26 and in the following 19 days asked clients to move their accounts to his new employer, Ameriprise, which some did to the tune of a combined $21 million, according to Edward Jones’ lawsuit.
Edward Jones is now asking a federal judge in Virginia to grant an injunction barring Clyburn from talking further with those clients. The firm is also pursuing a separate FINRA arbitration case against the advisor.
In May, Edward Jones sued a Missouri-based former advisor after he defected to LPL. In late 2018, Edward Jones sued two of its ex-advisors, who had also moved to Ameriprise, over alleged violations of non-solicitation agreements.
St. Louis-based Edward Jones has more than 17,000 advisors. It is not a member of the Broker Protocol, an industry agreement that permits advisors switching employers to take basic client contact information with them.
The firm’s lawsuit alleges that Clyburn, who had worked at Edward Jones for 10 years before joining Ameriprise, signed an employment agreement that included a one-year non-solicitation clause. Edward Jones claims Clyburn copied client contact information and took it with him to his new employer in violation of his employment agreements.
The firm further charges that Ameriprise “instructs incoming recruits to compile client information from their former firm and input it onto a thumb drive, some other storage device, or into a third-party, cloud-based system.”
Edward Jones claims Ameriprise and Clyburn utilized this same strategy, thereby jeopardizing the firm’s business in Wytheville.
“Client information including names, addresses, investment holdings and other financial information are confidential trade secrets, as defined by the agreement and by law, and the exclusive property of Edward Jones,” the firm’s lawsuit says.
Reached for comment, an Ameriprise spokeswoman said in a statement: “We will be filing our response in court shortly, which will articulate why we believe this case is without merit."
Edward Jones also claims that the remote work environment engendered by the coronavirus pandemic better enabled the advisor to solicit clients.
“Clyburn worked from home in the months before his resignation, giving him complete and unfettered access to Edward Jones confidential client information,” the firm says.
An attorney for Clyburn did not respond to requests for comment.