Law and legal issues

Attorneys and other compliance experts say it's important that financial advisors greet any type of negative feedback with a thoughtful response — especially if it could turn into a legal matter.

In its third suit in as many months, JPMorgan is accusing a former advisor of using its banking referrals to build a book of business and then trying to abscond with those clients to a rival firm.

Raymond James accuses the widower of an advisor of using data stored on his wife's company-issued computer to solicit clients for a rival firm.

In an opinion sought by Morgan Stanley, the Department of Labor finds the firm's deferred compensation "appears to be a bonus program" used to reward loyalty and good behavior and not a retirement benefit.

Errors and omissions policies may not represent the most exciting aspect of launching an advisory firm, but experts say custodians often require firms to purchase this and other insurance.

Vanguard was accused of giving advisors incentives to enroll clients in certain financial service without disclosing how they were being compensated.

Citi wealth head Andy Sieg went on Fox Business to deny allegations about workplace misbehavior. Industry experts say that's a good sign he's going to stick around, at least for a while.

Also this month in our disciplinary digest, a frequent CNBC analyst is sentenced to five years in prison for defrauding investors, and a former Fidelity advisor faced charges after borrowing millions from clients.

Recruiters say firms routinely cover advisors' lost deferred compensation in offer packages. Those deals are complicating efforts by advisors who contend they're still owed backpay.

Stanley Tulin and his wife, Riki, say they were deprived of more than $19 million by a scam run by their former investment advisors. And JPMorgan, they argue in a lawsuit, could have prevented the whole thing.