JPMorgan wins restraining order against $184M advisor who jumped to UBS
JPMorgan has won a temporary restraining order against an advisor in Florida who jumped ship for UBS, a lightning-quick proceeding that the advisor's attorney argued left her little time to respond to the complaint.
For the time being, Justin Barroso is barred from soliciting her former clients — excluding those whom she serviced prior to joining JPMorgan — and may not access any of the bank's documents or confidential information.
A hearing on the matter is scheduled for Nov. 18 in a federal court in Florida.
Barroso managed roughly $184 million in assets at JPMorgan, serving nearly 400 clients, according to the bank's complaint.
JPMorgan argued in its complaint that Barroso, who left the firm's Chase banking division Oct. 11, has been "aggressively soliciting JPMorgan clients to move their accounts" to UBS, citing at least eight unnamed clients who purportedly have told JPMorgan associates that they were contacted by Barroso. Morgan claims that at the time of its complaint, Barroso had successfully transitioned roughly 30 clients with assets totaling more than $14 million to UBS.
"JPMorgan has learned that [the] defendant is soliciting JPMorgan clients, primarily via phone calls, including calls to clients on their personal cell phones, seeking to induce such clients to transfer their accounts from JPMorgan to her at UBS," the wirehouse wrote in its complaint. "The clients have informed JPMorgan that [the] defendant's communications have been more than simply announcing her change of employment, and that she is actively seeking to induce them to do business with her at UBS."
Barroso shot back that the purported conversations with unidentified clients are "hearsay," and urged the judge to avoid taking the "extraordinary measure" of imposing a restraining order.
"The court should not rely on such hearsay submissions (indeed, the allegations appear to be based on multiple levels of hearsay) to enter a temporary restraining order against Ms. Barroso, especially when Ms. Barroso has not been afforded any opportunity to meaningfully respond," her attorney wrote.
A spokeswoman for JPMorgan declined to comment on the case against Barroso and on the firm's litigation strategy regarding brokers who depart for rival firms.
Barroso and her attorney did not immediately respond to requests for comment.
Barroso's attorney took particular issue with the timing of the legal action, noting that JPMorgan filed its complaint more than three weeks after she left the firm, but that he only received notice of the action less than 24 hours before the first court hearing was scheduled.
"To the extent JPMorgan claims this matter constitutes an emergency that the court must hear on less than one day's notice, it is an exigency which JPMorgan itself created through its own inaction," her attorney wrote.
The allegations are strikingly similar to another case JPMorgan recently brought against a former advisor who left for Raymond James. In both cases, JPMorgan cited unnamed clients who had reported back to the firm that they had been contacted by the former advisor, and both included allegations that in at least one such conversation, the advisor had badmouthed the bank's products, as well as intimations that the clients felt unduly pressured to transfer their accounts.
In the response to the bank's complaint, Barroso's attorney flatly denies "the allegations she improperly solicited any JPMorgan clients or that she improperly retained any confidential or trade secret information after resigning from JPMorgan." He requested a seven-day delay for the initial hearing in the case for seven days to give time to produce a fuller rebuttal of Morgan's allegations, but that motion was denied.