Edj legal action and protocol

What does it say in your contract?

according to the attorney it does not matter. Anyone can “sue” or file a TRO, or accuse of stealing company proptery ie. names and addresses, and presto you end up in court or end up writing a check. I am just curious how many FA’s have had some type of legal action against them after leaving Jones. As many know they are not part of protocol, as far as what the contract says it was signed well over 10 years ago during simpler times, so I have no copy nor any idea what I signed in my youth. I wanted to go Indie until today’s conversation with attorney in which I was advised to hold back 15% of t12 to cover costs.

[quote=madedjrep]according to the attorney it does not matter. Anyone can “sue” or file a TRO, or accuse of stealing company proptery ie. names and addresses, and presto you end up in court or end up writing a check. I am just curious how many FA’s have had some type of legal action against them after leaving Jones. As many know they are not part of protocol, as far as what the contract says it was signed well over 10 years ago during simpler times, so I have no copy nor any idea what I signed in my youth. I wanted to go Indie until today’s conversation with attorney in which I was advised to hold back 15% of t12 to cover costs. [/quote]
Your youth?  Were you a minor when you signed the contract?

Kind of hard to get better legal advice if your attorney cannot even review your employment contract.  No one’s fault but your own.

Your youth?  I thought the Jones contract was for 3 years.  Am I missing something?

In the state that I live they consider names and phone numbers property of the firm. Even if I take them out in my head I can still be accused of taking trade secrets. The intent of my quesiton is to figure out how aggressive EDJ has been in going after FA’s after they leave. Obviously they have a choice.

Your youth? I thought the Jones contract was for 3 years. Am I missing something?





************************************************************************from what my atorney says the 3 years is going after training costs. I am concerned about walking out with names and what EDJ will do.

[quote=madedjrep]In the state that I live they consider names and phone numbers property of the firm. Even if I take them out in my head I can still be accused of taking trade secrets. The intent of my quesiton is to figure out how aggressive EDJ has been in going after FA’s after they leave. Obviously they have a choice. [/quote]
Are you talking with an attorney who has specific prior experience/expertise in this industry?  Based on your comments here it doesn’t sound like it.  Either that or you haven’t completely understood what he would have told you.

For example, I am not an attorney but no state considers publicly available information like names, addresses and phone numbers to “belong” to a firm. (If something is, by definition, publicly available, how can any firm “own” it?  If anyone owns it, it would be the individual clients involved.)   However, each firm is required by Regulation S-P (Privacy of Consumer Information) to safeguard all client information, and to not disclose nonpublic personal information.  It is largely for this reason that Protocol firms are able to agree to let departing FAs take publicly available information about clients; otherwise they would be in breach of Reg S-P.

There is much more nuance to it than that, but my point is that either your attorney has no experience in this, or you misunderstood him on this point.  And if there is clearly misinformation on a basic point, who knows what else might be wrong as well.

You are wise to seek legal counsel on this, especially since you have no copy of your employment agreement, but be certain you are dealing with an attorney who has experience in helping brokers exit from broker/dealers.  Otherwise you won’t receive any meaningful value for your effort.

How long have you been with EDJ?

[quote=exEJIR]How long have you been with EDJ?

It’s changing, but the old Jones culture came from Ted Jones where he stated that no one should be there unless they wanted to be there. Of course, later the 3 year contract came into being, but Aggressive is not what I would call them. Could be wrong though.

[quote=madedjrep] Your youth? I thought the Jones contract was for 3 years. Am I missing something?





************************************************************************from what my atorney says the 3 years is going after training costs. I am concerned about walking out with names and what EDJ will do.[/quote]



I think standard protocol is to send letter stating that you are under a non-compete for a year (bascially reiterates what your contract states).

If they have no way if knowing that you took client info, they can’t do anything to you. However, if you start sending in pre-filled ACAT’s, that will send up a red-flag. And if they start finding out you are directly contacting former clients, that can get you in trouble. Just be careful. And if you’re a small producer (like under 25mm in AUM), you likely won’t be on their radar.



But this is just my opinion.

If you have a larger book, which at 10 yrs I hope is the case, within an hour of you giving notification they will have a team from home office on the phone with your clients.  Chances are they will seek a TRO also.  That is why most producers give notification lake on a Friday afternoon, so the legal team hopefully isn't able to put the TRO into place until the following Monday morning.  That way you get the weekend to call your clients personally to let them know that you have moved on.  You can't solicite them moving due to your non-compete, but you can let them know where and why you moved.  It is a very fine line.

I left Jones almost two years ago to go indy–was at Jones 14 years–they were quite nasty and they put a whole team on my clients to keep them from trying to transfer.  However, they only sent out letters to me with the threats–but never any action.  I did go by the rules and didn’t directly contact my former clients—I did ads in the paper–I did send out the tomstone letter, and since it is a small town–I made myself very visable in the stores, community events and I ate out more than ever in the town.  Of course I would run into clients and they would ask questions and set up appointments.  In the end I took only 50% of my target book.  But much much more happier as an indy.  The funny thing was I never had any ill will at Jones–but I did after there were so nasty after departure.

I have worked with EDJ for over 10 years. I started right out school and was happy to have a job. I did not keep copies of docs that I signed. I consulted with a attorney who specializes in the industry. His name was given to me from RayJa. He knew the names of all the Jones legal dept. I have built a nice business with over 100mm AUM. After looking at all the platforms from UBS, SB, MS, RJF, and discussions with LPL. I realize I have a pretty basic platform and sure could use other ways of developing my fee based business. I am pretty nervous about loosing clients and either being forced to write a big check or end up in a long drawn out legal battle. I spoke with 4 EDJ FA’s who have left. 2 had their new BD write checks for 10% of t12, the other had a legal battle for 2 years and the last would not talk. If I go indie obviouly I am paying for everything.





Roadhard, curious why you think only 50% came over. Was it 50% of what you wanted or 50% of total book. I have about 700 households but only want about 250 of those. I started from scratch. Have you heard of any other experience with EDJ FA’s leaving? thanks

My 50% was the targeted book!  Not the whole book.  The reason is that Jones placed a 16 year vet in my former office–gave them ad money to work with–then sent out 5 letters over a 6 week period to each client warning them that I have left and that I might have compromised their privacy!  Nice!  I had some clients call me and said things like I can’t believe you would have taken off with my personal information.  Jones lawyers sent me a total of 12 letters over a year timeframe claiming that I violated rules.  It wasn’t until I sent them a personal letter telling them to ---- or get off the pot!  I never heard another word from them.  When I left I had 87 million AUM.  Like I said I thought I left on good terms, I never violated the rules, ect…, but my biggest complaint was the way they treat you when you leave.  By the way madedjrep I also started from scratch–so I know where you are comming from.

Roadhard, you have been a big help, I am wrestling with RayJay and MS. One way I have probably alot of happiness and a true independent office but with all the liability and the other way a massive check and a 9 year commitment.

but my biggest complaint was the way they treat you when you leave.  By the way madedjrep I also started from scratch–so I know where you are comming from.

Now that we have a new Treasury Sec–is paying income tax a requirement???

I was one of three advisors that left EJ a year ago to go independent.  We all left on the same day.  Together we had 35 years combined experience at EJ.  The three of us all had very different experience leaving.

what firm did you end up at and are you happy? regrets? thanks for the advice on the transfer. Did you look at a wirehouse?

Raymond James and yes we are happy, very happy.  We did not look at other wirehouses (I did not want someone else to own my business) but we did look at a number of independents including Wachovia FiNet and LPL.  Ultimately we felt transitioning clients from Edward Jones to Raymond James would be easier.  Fees for custodial accounts were similar, statements were nearly identical, etc.   

what about auction rate securities mess?

I think most of that stuff happened before we joined.  I know it is an ongoing concern but other than that, I don't really know a lot about it.