Law and legal issues

Brett Griffin was given two months' notice that he would lose his job when Charles Schwab closed the office where he was working in Temecula, California. Now the firm accuses him of using some of that time to help move client data to a rival RIA.

Henry Robert Gleckler IV's dispute with JPMorgan over his alleged solicitation of his former clients now heads for a resolution before a FINRA arbitration panel.

JPMorgan again shows it makes a sharp distinction between advisors who build their own books of business and those who amass clientele from bank referrals.

The latest SEC Enforcement Activity report finds that the watchdog agency has only started four regulatory cases against public companies under the current presidential administration.

Wells Fargo had argued that FINRA arbitration was the correct forum for a complaint brough by an ex-employing alleging the firm had used false interviews to boost its diversity credentials. Now the whistleblower will have his day in court.

The Financial Services Institute is pressing the Securities and Exchange Commission to adopt formal procedures to prevent what it deems the sometimes capricious enforcement of industry rules.

Matthew Madera has become the latest former JPMorgan private client advisor to be sued after leaving for another firm. In a recent stipulated order, he agreed to stop soliciting former clients until the dispute can be resolved.

Bankruptcies at First Brands and Tricolor should be a wake-up call for banks exposed to the private credit market. Banks should treat indirect lending to shadow banks as a high-risk activity that demands active oversight.

Financial Planning's AI Readiness Survey found that advisors are already using AI for creating legal document summaries and seeing results, but legal experts warn that undisclosed, unmonitored use could open firms up to liability.

Former Morgan Stanley broker Kathy Frazier sued the firm in 2015 and was later joined by six other Black plaintiffs who also alleged they had been systematically excluded from the best advisory teams and client leads.

Compliance and former SEC lawyers say remaining industry regulators will prioritize preventing imminent investor harm while putting off some paperwork and routine tasks.

Francisco Gil tried to claim his status as an independent contractor entitled him to tax deductions for travel, meals and marketing expenses. The IRS and a federal judge said he was in fact an employee.

Merrill had sought a temporary restraining order to prevent members of a large Atlanta-based team who left last week from soliciting former clients for their new firm.

UBS contends a group of advisors who left this month to form an RIA inherited most of their clients from retired advisors who were counting on being paid from their former books of business.

Also this month in our disciplinary digest, a now-barred 'problem broker' for Stifel lands his former firm another hefty settlement, and an advisor is accused of fraud for trying to poach clients from his old firm.

In a lengthy court reply, advisors who left Merrill this week to form an RIA with Dynasty Financial Partners accuse Merrill of "bad faith" for putting them on administrative leave and failing to reinvest in their business.

Merrill accuses industry rivals of conspiring with a group of former employees to remove confidential client information and trade secrets for the formation of a new RIA.

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.