J.P. Morgan Securities has filed a lawsuit to try to stop a former broker from stealing its clients, arguing he violated a nonsolicitation agreement.
To date, David Anderson attracted numerous clients with more than $20 million in business to join him at Stifel, according to J.P. Morgan's complaint filed in Michigan federal court. J.P. Morgan wants the court to issue a temporary restraining order to stop Anderson from contacting clients until FINRA concludes arbitration proceedings.
JPMorgan learned Anderson has been contacting clients after resigning his position at the firm in mid-June, according to the complaint.
“The clients have informed J.P. Morgan that (Anderson’s) communications have been more than simply announcing his change of employment, and that he is actively requesting meetings with the clients or otherwise seeking to induce them to do business with him at Stifel,” the complaint read.
Anderson first joined J.P. Morgan in 2009, eventually working as private client advisor and select advisor in its Select Advisor Group while operating out of a Rochester, Mich., branch office; he was not expected to cold call potential clients or build a client base independent of bank referrals, according to the complaint. Anderson’s BrokerCheck profile shows previous stints with a number of firms, including UBS and Citigroup.
According to J.P. Morgan, Anderson signed a nonsolicitation agreement prohibiting him from soliciting clients for a year if he left his role, while also barring him from using J.P. Morgan proprietary information when attracting clients. After Anderson joined Stifel, J.P. Morgan found out Anderson had reached out to clients to entice them to move their accounts along with him, according to the complaint.
Anderson would call or text clients on their personal cell phones, claiming they would “have more products, and better investment options and services” at Stifel as opposed to J.P. Morgan, where he was restricted by what he could offer. (Stifel did not comment on this story.)
In one instance, a couple who were J.P. Morgan clients told the firm Anderson came to their home with Stifel marketing materials to entice them to join him there, even though they weren’t interested. According to J.P. Morgan, Anderson’s visit was “unplanned, unannounced and made them feel very uncomfortable.”
But he found success with other clients. JPMorgan alleged about 15 households with assets totaling about $24 million already transferred their accounts to Anderson at Stifel. J.P. Morgan also accused Anderson of taking “confidential client information,” including cell phone numbers, in order to solicit clients to make the move.
“Unless Anderson’s misconduct is immediately restrained and enjoined, other competitors of J.P. Morgan will be encouraged to engage in the same kind of improper behavior with complete impunity, the result of which will inflict severe and permanent damages on J.P. Morgan,” the complaint read.
The temporary restraining order would prevent Anderson from soliciting (or attempting to solicit) J.P. Morgan clients he worked with or that he only knew about because of his time there, as well as stopping him from using any proprietary information relating to the brokerage firm until the FINRA arbitration is resolved.