JPMorgan is aggressively defending its client rosters, filing a new lawsuit accusing three former advisors of violating non-solicitation agreements when they moved to Raymond James & Associates.
The bank has filed
In the most recent case filed this week, JPMorgan is moving quickly to secure a temporary restraining order before former bank-channel employees Nathan Shields, Mark Obrzut and Jackson Stewart convince more clients to transfer assets.
The Carmel, Indiana-based trio has moved more than 20 accounts totaling $30 million since they switched firms on Aug. 3. They previously serviced 770 clients with about $270 million, according to JPMorgan’s lawsuit.
JPMorgan claims it was tipped off to the advisors’ actions by clients who complained to the bank about being petitioned to move their business to Raymond James. The bank has made similar claims about such tipoffs in other lawsuits over alleged violations of non-solicitation agreements.
Two clients allegedly told JPMorgan that the advisors told them about their impending career moves, according to the bank’s lawsuit, which was filed in federal court in Indiana.
About a dozen clients have also purportedly told JPMorgan of phone call solicitations they received from Shields and Obrzut since the two advisors moved to Raymond James, according to the civil complaint. According to JPMorgan, clients have also reported that the advisors are using a “script,” claiming Raymond James can offer better products and design better portfolios, and that because Raymond James is not a bank, they can focus 100% on their clients’ investments.
Even without net new assets, the firm's assets under management and administration were pushed upward by market gains.
Areas around Jackson Hole, Aspen, Palm Beach, Miami, New York, Dallas and Austin are in the group. Other top performers may come as more of a surprise.
Graham Tasman is principal of advisory services at Grant Thornton Advisors LLC.
JPMorgan also claims that Shields and Obrzut visited a bank branch office on personal business, but spoke with JPMorgan clients while there.
“In fact, Obrzut approached a client while in the lobby of the JPMorgan branch office and had a conversation with the client. A JPMorgan employee overhead Obrzut say to the client to call him in his office to set up an appointment with the client to discuss business,” JPMorgan says.
The bank also accuses the advisors of improperly taking client contact information when they left to join Raymond James.
Neither a spokeswoman for Raymond James nor the advisors could not be reached for immediate comment.
A JPMorgan spokeswoman declined to comment on the case.
In its lawsuit, JPMorgan says the advisors’ actions are damaging to its business model, which includes a team-based approached and providing client leads to brokers. The firm calls the defendants’ misconduct “highly disruptive to JPMorgan’s ability to conduct business in a stable manner and to maintain JPMorgan’s goodwill with its clients.”
Shields and Obrzut had worked at the company or its predecessor, Chase, for a decade. Stewart had been a private client banker since 2009, according to court documents.
During that time, all three men had signed non-solicitation agreements, according to JPMorgan.
Shields and Obrzut had been introduced via JPMorgan to “hundreds of existing bank customers,” and they “were not expected to engage in cold calling or attempt to build a client base independent of referrals from JPMorgan,” the company says.
The bank is asking a federal judge for a temporary restraining order for alleged breach of contract, misappropriation of trade secrets and unfair competition among other claims.
JPMorgan is also pursuing claims in a separate arbitration case, according to court documents.
The bank has followed a similar course of action in its other lawsuits against former employees over alleged violations of non-solicitation agreements. So far this year, JPMorgan has claimed ex-brokers have
