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Ameriprise advisor sued by JPMorgan — then rapidly hit with TRO — fights back

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An Ameriprise advisor has asked a federal judge to reconsider an order barring him from talking with former clients at JPMorgan, arguing that he never had his day in court.

U.S. District Judge Janet Neff had granted JPMorgan’s request for a temporary restraining order within 48 hours of the bank filing the lawsuit — and before advisor Ryan Riley’s attorneys filed a motion to dismiss the case.

The legal battle began Aug. 5, when JPMorgan filed its lawsuit claiming Riley had violated his non-solicitation agreements since leaving the firm for Ameriprise a month earlier.

Approximately $25 million of the $146 million in client assets Riley oversaw at JPMorgan have transferred to his new employer thus far, according to the bank’s lawsuit.

Riley’s attorneys, however, contend they weren’t given enough time to respond to JPMorgan’s allegations, and in a new court filing are asking the judge to reconsider her temporary restraining order.

Neff has given JPMorgan until 5 p.m., Aug. 12 to respond to Riley’s team, according to court records.

The case is the latest in a steady stream of lawsuits from brokerages against advisors over alleged violations of non-solicitation agreements. Just last week, Edward Jones sued one of its former brokers for soliciting clients to join him at his new employer, Ameriprise. In March, JPMorgan won a temporary restraining order against an advisor who joined Merrill Lynch and was allegedly soliciting clients.

The St. Louis-based firm claims its rival “instructs incoming recruits to compile client information from their former firm” as a matter of course.
August 4

In this latest legal spat, JPMorgan says Riley had been “aggressively” soliciting clients to move accounts to Ameriprise since he switched firms July 10, according to the bank’s lawsuit filed in a federal court in Michigan.

Since 2011, Riley had been an advisor with the bank’s Chase Wealth Management unit, which is not a member of the Broker Protocol. Ameriprise is a member of the industry agreement, which permits advisors switching firms to take basic client contact information with them.

Riley’s defense

JPMorgan contends that Riley, as a Chase private client advisor, wasn’t expected to engage in cold calling or to build a client base independently. Instead, Riley “sat at his desk at the JPMorgan Chase bank branch and was introduced to hundreds of existing bank clients,” the firm’s lawsuit says.

But for his position at JPMorgan, the complaint continues, Riley “would not have had any contact with the substantial majority of the clients the firm assigned to him and whom he is now soliciting.”

Riley’s attorneys dispute JPMorgan’s allegations and call the lawsuit “frivolous,” in court filings, adding that the bank “offers no credible, admissible evidence that [Riley] actually engaged in misconduct.”

JPMorgan is pursuing a separate FINRA arbitration case against the advisor, who is based in Okemos, Michigan.

Riley claims he notified a few clients that his employment changed, but never solicited anyone, his attorneys write in the latest filing. Merely announcing new employment is not akin to solicitation, they continue, saying that that principle has been upheld in other courts.

In the filing, Riley attests he found contact information for these clients in public databases, and did not take any confidential information with him when he left JPMorgan. Several clients, whose names have been redacted, filed affidavits affirming that he did not solicit them to move accounts.

A temporary restraining order barring Riley from talking with clients is damaging to him and to the clients, who have the freedom “to do business with whomever they choose,” his attorneys argue.

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